New Zealand's Central Bank Hikes Interest Rate to 5.25%

New Zealand's central bank surprised economists on Wednesday, by imposing an aggressive half-point rate rise, to bring its benchmark interest rate to 5.25%.

It was the reserve bank of New Zealand's 11th straight rate hike as it tries to cool inflation, which is running at 7.2%, far above the bank's target level of around 2%.

It brings the key rate to its highest level, since the global financial crisis in 2008.

New Zealand's benchmark rate is now among the highest in the developed world, and the bank's aggressive action stood in contrast to Australia's central bank, which on Tuesday decided to pause its round of rate hikes and leave its benchmark rate at 3.6%.