The New Zealand dollar rose to around $0.570 after the Reserve Bank raised its cash rate by 25 bps to 2.50%, as expected. The move marked the central bank’s first rate increase in more than three years, as policymakers sought to contain the inflationary impact of the Middle East conflict and prevent damage to the economic recovery. The RBNZ acknowledged that easing geopolitical tensions and the recent decline in energy prices had reduced near-term inflation risks but warned that consumer price pressures were likely to remain elevated. Although the economic recovery is projected to have lost momentum in the second quarter amid the energy shock, growth is expected to regain traction in the third quarter. The decision was narrowly anticipated by economists and financial markets, which also priced in one more move to 2.75% by September.