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New Zealand raises interest rates to 2.75 percent

New Zealand raises benchmark interest rates by 0.25 percent to 2.75 percent

New Zealand raises interest rates to 2.75 percent

WELLINGTON, New Zealand (AP) -- In another sign the world economy is finally picking up steam after five years of recession and anemic growth, New Zealand has become the first developed nation to embark on a program of interest rate hikes.

New Zealand's Reserve Bank on Thursday raised its benchmark interest rate by quarter of a percent to 2.75 percent after holding it at record lows for three years. The bank indicated it plans to continue raising rates to about 5 percent by March 2017.

The South Pacific nation of 4.5 million has benefited from booming demand in China for its milk products and a rebuilding effort in the city of Christchurch following a devastating earthquake there three years ago.

Growth has been running at about 3.5 percent and housing prices have increased rapidly.

Updated : 2021-06-23 17:31 GMT+08:00