OCR up to 6.50%

The Reserve Bank has increased the Official Cash Rate from 6.25% to 6.50%.

"New Zealand's economy is still performing strongly and recent economic data has delivered positive surprises," Reserve Bank governor Alan Bollard said.

"Resources will remain stretched fro some time yet, and there are still inflation pressures."

"However, the recent monetary policy tightenings still have to work their way through the economy, and the high exchange rate will also have its effect. Given this, we believe that the current settings of monetary policy are now doing enough to ensure price stability as defined in the Reserve Bank's Policy Targets Agreement."

The Reserve Bank will continue to monitor events as they unfold."