In an effort to keep housing prices and inflation in check, New Zealand’s central bank hiked interest rates for the first time in seven years.

The Reserve Bank of New Zealand (RBNZ) raised its cash rate to 0.5 percent, up a quarter of a percentage point.

Economists had predicted a rise last month, but the bank delayed it because to a Covid-19 Delta outbreak.

New Zealand was among the first industrialized countries to reverse rate cuts implemented during the epidemic.

The RBNZ also stated that when the economy recovers, it intends to withdraw more stimulus measures.

“Further monetary policy stimulus reduction is envisaged over time,” the RBNZ said, “with future actions reliant on the medium-term outlook for inflation and employment.”

New Zealand has rebounded quickly from a recession last year, thanks in part to its ability to contain the coronavirus and reopen its economy ahead of other countries.

At its July 2014 interest rate setting meeting, the RBNZ hiked borrowing costs for the first time.

In March of last year, it lowered its main interest rate to a record low of 0.25 percent to assist the economy weather the impact of the coronavirus outbreak.

Emergency Measures Are Being Removed

Last year, central banks, governments, and international financial institutions cut interest rates and poured trillions of dollars into the global economy to try insulate it from the impacts of countries imposing border closures and lockdowns.

With the increase, New Zealand joins a select group of industrialized nations that have lifted borrowing prices in recent weeks as central banks seek to reverse emergency measures.

Since the coronavirus epidemic began in August, South Korea became the first major Asian economy to hike interest rates.

The Bank of Korea raised its benchmark interest rate from 0.5 percent to 0.75 percent, a new low.

The measure was made to improve the country’s family debt and housing prices, both of which have risen sharply in recent months.

In the previous month, Norway and the Czech Republic have both increased their borrowing prices.

In the next months, other countries are anticipated to raise interest rates as well. Individuals and companies will undoubtedly bear the brunt of these rising borrowing prices.