OCR increased to 5.5%

Commenting on the decision, Reserve Bank Governor Alan Bollard said "The New Zealand economy continues to perform strongly and this is being supported by further improvements in the global economy."

However, domestic inflation pressures remain strong and annual CPI inflation looks set to rise over the year ahead, as we projected in our March Monetary Policy Statement.

Moving interest rates to less stimulatory levels appears prudent to ensure inflation remains within the target range over the medium term.

"Looking forward, the Reserve Bank will continue to monitor the data to see what it implies for medium-term inflation.

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