Wellington • New Zealand raised its benchmark interest rate Thursday to 3.5 percent, but signaled it was pausing its program of rate hikes.
The announcement prompted a sharp drop in the New Zealand dollar, which was trading down nearly 1 percent at $0.8625.
New Zealand has been going it alone among developed nations this year by embarking on interest-rate tightening. Thursday marked the central bank's fourth successive hike of 0.25 percent.
However, economic conditions have changed significantly in recent months. The hikes have seen the New Zealand dollar bid up as global investors seek better returns, which has hurt exporters. And prices for dairy products, the country's leading export, have fallen.