N Zealand cuts rates for first time in four years

WELLINGTON, Aug 14 (AFP): New Zealand's central bank cut interest rates Wednesday for the first time in four years as worldwide efforts to rein in inflation draw to an end, though officials offered a warning about the global economic outlook.

The Reserve Bank of New Zealand announced a 25-basis-point reduction in borrowing costs to 5.25 per cent-the first such move since the start of the Covid-19 pandemic in early 2020.

Like many countries, New Zealand has steadily raised rates to try to tame soaring consumer prices caused by a range of factors including snarled global supply chains and burst of post-pandemic demand.

Outside China and Latin America, policymakers have been wary of cutting rates too far, too fast, fearing cheaper borrowing could rekindle inflation that has pummelled consumers and stalled economies.