The Reserve Bank of New Zealand (RBNZ) announced its seventh consecutive rate hike on Wednesday and indicated a more hawkish policy stance over the next few months to curb soaring inflation.

The aggressive tone within the central bank’s statement cautioning of future rate rises happening sooner than forecast bolstered the New Zealand Dollar and lifted swap rates.

The central bank hiked the official cash rate (OCR) by 50 basis points to 3.0%, a level not seen in seven years, and now forecasts rates to hit 4.0% by early 2023, compared to a prior forecast of 3.7%, Reuters reports.

The fourth consecutive 50 basis point hike unveiled on Wednesday, together with previous smaller increases that increased the cash rate from an all-time low of 0.25% in October, signalled the most aggressive tightening by the RBNZ since 1999.

"The Committee agreed that domestic inflationary pressures had increased since May and to further bring forward the timing of OCR increases," said the central bank statement.

The RBNZ also hiked the forecast high for the cash rate to 4.1%, where it is set to stay until 2024.

"The statement was suitably hawkish, and highlighted the need to maintain pressure on the economy to demand," stated Jarrod Kerr, chief economist at Kiwibank.

Inflation in New Zealand has been running at 30-year highs, reaching 7.3% in Q2.

"Committee members agreed that monetary conditions needed to continue to tighten until they are confident there is sufficient restraint on spending to bring inflation back within its 1-3% per annum target range," the central bank stated.

Furthermore, the Reserve Bank of New Zealand said it predicts house prices, a key inflation driver, to decline by approximately 20% by the middle of 2023 from their high at the end of last year.

"We're seeing prices go from being well north of sustainable to being within the zone of sustainable," said RBNZ Governor Adrian Orr.