WELLINGTON New Zealand's central bank on Wednesday raised interest rates by 25 basis points to the highest in more than 14 years at 5.5% and reiterated inflation remains too high even as it still forecast a recession this year.

The decision was in line with expectations from 21 of 25 economists in a Reuters poll forecasting the Reserve Bank of New Zealand (RBNZ) would raise rates by 25 basis points in its twelfth straight hike since October 2021.

"The OCR (official cash rate) will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1% to 3% annual target range, while supporting maximum sustainable employment," the statement said.

(Reporting by Lucy Craymer; Editing by Tom Hogue)