New Zealand shows the RBA the way

Lifting interest rates amid a rising currency was a risky but necessary strategy for New Zealand's central bank, and it looks to be working.

As Australians we love to make jokes at the expense of our Trans-Tasman neighbours, but the Reserve Bank of New Zealand's management of interest rates in the face of a rising currency is one to be admired. Notwithstanding some of the differences in our two economies, it took some nerve for New Zealand's central bank to raise rates by 1 per cent earlier this year, despite what was a rising New Zealand dollar at the time.

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