Australian Economy

ASX rises to six-month high, New Zealand tipped to fall into ‘shallow recession’ as interest rates hit 14-year high

The Australian share market has lifted to its highest level in almost six months, with investors betting the Reserve Bank of Australia (RBA) will slow the pace of its upcoming interest rate hikes.

But across the ditch, the Reserve Bank of New Zealand (the RBNZ) has done the opposite.

The RBNZ announced its largest ever interest rate hike on Wednesday, and warning borrowing costs will “reach a higher level, and sooner than previously indicated”.

The ASX 200 index closed 0.7 per cent higher, at 7,232 points.

The Australian dollar was buying 66.36 US cents, after slipping 0.2 per cent.

Bitcoin was relatively steady at $US16,470, after dropping to a two-year low yesterday. Its value has also plunged 63 per cent since the year began.

This aggressive cryptocurrency sell-off was sparked by central banks lifting rates at their fastest pace in decades, and a string of high-profile collapses in the volatile sector, including the recent bankruptcy of digital currency exchange FTX.

RBNZ’s largest ever rate hike

The RBNZ lifted rates by 0.75 percentage points on Wednesday, bringing New Zealand’s cash rate to 4.25 per cent, its highest in almost 14 years.

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