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Official Cash Rate Rises
The Reserve Bank has increased the official cash rate to 2.75%.

It is the first time in three years that the OCR has been changed. In 2011 it was dropped to a record low of 2.5% in response to the Canterbury Earthquakes.

In a statement, Governor of The Reserve Bank Graeme Wheeler says that the increase is necessary to moderate rising inflation which is expected to continue over the next two years.

The Reserve Bank sees a faster pace of inflation than in its December forecast, with the consumers price index rising to 2 percent as soon as the June quarter, a level the bank had previously expected in mid-2015. While a strong currency will keep a lid on imported inflation, the bank expects non-tradable inflation to increase to about 4 percent.

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