New Zealand’s central bank has raised the official cash rate (OCR) by another 50 basis points to 4.75 percent after Cyclone Gabrielle destroyed the livelihood of many Kiwis.
“It is too early to accurately assess the monetary policy implications of these weather events, given that the scale of destruction and economic disruption are only now becoming evident,” the committee said.
“The timing, size, and the nature of funding the government’s fiscal response are also yet to be determined.”
The monetary policy committee agreed that the OCR still needed to increase to return inflation back down to its target range.
The February statement revealed that the effects of Cyclone Gabrielle had been up for discussion, including its economic damage to employment and trade and damage to property. They expect there will be an “immediate upward pressure” on prices….