Reserve Bank (RBNZ) Governor Adrian Orr's unpanicked approach to continue a tightening cycle despite the expected economic hit from Cyclone Gabrielle has the backing of financial experts.
Orr's made huge increases to the official cash rate (OCR) since late 2021 and, as of Wednesday, has added 450 basis points to try and bring spiralling inflation - sitting at 7.2 percent - under control.
The National Party said Wednesday's 50 basis point OCR hike "will be deeply concerning for Kiwis already struggling with the cost of living".
Meanwhile, ACT Party leader David Seymour said Orr was "left with an impossible choice. He either hikes the OCR and makes life harder for mortgagees, or he puts the brakes on and inflation hangs around stronger for longer".
Milford Asset Management investment analyst Katlyn Parker told AM the RBNZ's approach - a slightly more prudent one than November's 75 basis point move - made sense.
The more cautious move comes in the wake of Cyclone Gabrielle, which last week destroyed infrastructure, closed businesses, left homes in ruin and wiped out crops across large parts of Hawke's Bay and Gisborne.
Parker believes the RBNZ got the balance right.
"They kept the peak for the OCR relatively unchanged - so they still see the peak at about 5.5 percent and that does also make sense because inflation is still a problem, it's still running very hot - it remains sticky," she said.
"[The RBNZ] had a very tough scenario yesterday to communicate and I do think they did a good job by not panicking and staying the course."
Infometrics principal economist Brad Olsen also agreed with the RBNZ's move, saying inflation was "still considerably too high".
"For the Reserve Bank, when they've looked through the numbers, they're still worried that when you look at economic pressures, there's still a lot going on," Olsen told Newshub Late on Wednesday.
"Economic demand is still outstripping just how much supply we have and, to try and bring down the temperature of the economy, they're needing to push those interest rates up further.
"Importantly, although they've made a 50 basis point increase… they're also still expecting that there's perhaps another three 25 basis point increases throughout the next few months to try and really knock the top off inflation and get things back into a more manageable range for Kiwi households."
Orr told reporters on Wednesday the latest increase had already been priced into banks' lending rates.
He also warned companies that now wasn't the time to try and make quick cash.
"Do not use near-term price spikes as an excuse for starting to put up the price of everything, everywhere," he said. "That would be called 'profiteering.'"