New Zealand's central bank on Wednesday hiked interest rates by a record amount and warned the economy might have to spend an entire year in recession to bring sky-high inflation under control. The Reserve Bank of New Zealand (RBNZ) raised the official cash rate (OCR) by 75 basis points to 4.25% and crucially now sees rates peaking at 5.5%, compared with a previous forecast of 4.1%. The central bank's overtly hawkish tone caught some traders off-guard, lifting the local dollar and sending swap rates higher, while its predictions of a recession also surprised.
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The Reserve Bank of New Zealand (RBNZ) said on Tuesday the current governor, Adrian Orr, had been reappointed for another five-year term starting in late March next year, Reuters reported. New Zealand finance minister Grant Robertson said the reappointment followed the RBNZ's board unanimous recommendation. “In light of global conditions, this is also a time when stability and continuity are paramount for the bank,” Robertson said. The central bank is dealing with significant macro and local growth headwinds.
Two of New Zealand's largest ski areas on Tuesday were placed into a type of bankruptcy proceeding following a disastrous winter season with barely any snow, the Associated Press reported. The Tūroa and Whakapapa ski areas, which are both owned by Ruapehu Alpine Lifts, entered what is called voluntary administration. The proceeding is open to failing New Zealand businesses and has some similarities to chapter 11 bankruptcy procedures in the U.S.
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A smaller-than-anticipated rate hike in Australia has fueled talk that global monetary tightening will slow as the growth outlook turns, Reuters reported. For some, the debate is premature with the likes of the U.S. Federal Reserve unlikely to ease up on the brakes until inflation shows clear signs of slowing.
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New Zealand's government said on Monday it had transferred Kiwibank's assets to a new state-owned company, since the lender no longer fit within the long-term plans for two state entities that currently own it, Reuters reported. Kiwibank, which is New Zealand fifth-largest retail bank, was owned by state-owned entities New Zealand Post, Accident Compensation Corporation and sovereign wealth fund New Zealand Superannuation Fund.
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New Zealand home prices fell on an annual basis for the first time in 11 years in July, adding to signs of a slowdown for the global economy as central bankers worldwide try to tame inflation, the Wall Street Journal reported. The national median sale price of 810,000 New Zealand dollars, equivalent to $519,000, was 1.8% lower than a year earlier, cooled by higher interest rates and lending restrictions, the country’s real-estate institute said Thursday. It was the first annual fall in prices since July 2011.
A large creditor of failed Wellington construction company Armstrong Downes Commercial is trying to replace the liquidators with someone with “some teeth” to ensure subcontractors get paid, Stuff.nz reported. Armstrong Downes (ADC) shareholders had appointed David Ruscoe and Russell Moore from Grant Thornton as liquidators. However, Lower Hutt developer Kevin Melville, whose High St Holdings 2020 Ltd was a client, said he wanted to replace them with Damien Grant of Waterstone Insolvency as the new liquidator. ADC had two directors, Doile and Taylor.
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A New Zealand wholefoods shop and education centre is facing an uncertain future. An email sent to customers from Wholegrain Organics on May 13 said the business was entering voluntary insolvency, and it would “review the business to see if there are possibilities to restructure,” Stuff.NZ reported. The email said that any orders in process or refunds due at the time of the notice would still be completed. The non-profit business has a shop, bread mill, distribution centre, cafe and a children’s workshop at its premises on the north side of The Square.
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New Zealand welcomed tourists from the U.S., Canada, Britain, Japan and more than 50 other countries for the first time in more than two years Monday after dropping most of its remaining pandemic border restrictions, the Associated Press reported. The country has long been renowned for its breathtaking scenery and adventure tourism offerings such as bungy jumping and skiing. Before the spread of COVID-19, more than 3 million tourists visited each year, accounting for 20% of New Zealand’s foreign income and more than 5% of the overall economy.
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Air New Zealand Ltd will centralise operations in Auckland and move its workforce in the city to a refurbished airport campus, the airline said on Wednesday, adding that the decision will help it cut costs by a fifth over 15 years, Reuters reported. The move, expected to occur in 2024, comes as New Zealand's flag carrier looks to reduce property costs while aiming for an uptick in business after two years of hard-line international border restrictions at home.
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