CHRISTCHURCH, New Zealand — New Zealand’s central financial institution raised its benchmark rate of interest by a half-point Wednesday to 4.75% because it continues attempting to wrestle down inflation.

The rise, which may increase the borrowing prices for shoppers on every thing from bank cards to mortgages, comes regardless of the financial ache {that a} devastating cyclone is already inflicting on many individuals. The financial institution stated that over time, the cyclone rebuild will solely add to inflationary pressures.

Cyclone Gabrielle hit New Zealand final week, killing 11 individuals and inflicting billions of {dollars} in injury to properties and infrastructure.

Reserve Financial institution Governor Adrian Orr stated the committee that makes rate of interest choices agreed the speed wanted to extend to make sure that inflation returned to the financial institution’s goal of round 2% from its present degree of seven.2%.

Orr stated that whereas there have been some early indicators value pressures are easing, core inflation remained too excessive and employment was at its most sustainable degree, with the unemployment price at a low 3.4%.

“Cyclone Gabrielle and different latest extreme climate occasions have had a devastating impact on the lives of many New Zealanders,” Orr stated. “It’s too early to precisely assess the financial coverage implications of those climate occasions, on condition that the size of destruction and financial disruption are solely now turning into evident.”

Orr stated the committee believes that the catastrophe is prone to enhance costs for some items over the approaching weeks, whereas having a detrimental impression on financial exercise and exports. He famous that the federal government had but to find out the size and timing of its financial response to the cyclone.

The 0.5% price rise comes after a file 0.75% hike in November. At 4.75%, the official money price is on the highest degree it has been since early 2009, quickly after the worldwide monetary disaster.

The speed enhance was according to market expectations, and the foreign money was little modified, with 1 New Zealand greenback buying and selling at about US$0.62.

New Zealand’s key rate of interest is now much like the U.S. price of 4.5% to 4.75% however is greater than in lots of different developed nations together with neighboring Australia, the place the speed is 3.35%.