On Wednesday, New Zealand's central bank met market expectations by lifting the official cash rate (OCR) to three per cent.
The RBNZ has now raised by 50 basis points at an unprecedented run of four consecutive meetings in order to right inflation.
It has also published a worsening set of forecasts in its August Monetary Policy Statement, believing the OCR will peak at 4.1 per cent in March 2023.
The rate sat at the emergency level of 0.25 as recently as October, but has been lifted at every RBNZ meeting since then.
"Core consumer price inflation remains too high and labour resources remain scarce," Governor Adrian Orr said.
The consumer price index (CPI) inflation is at 7.3 per cent in New Zealand, the highest level in three decades.
Just as in Australia, the RBNZ's target band for inflation is one to three per cent.
While the bank predicts inflation will begin to subside, Mr Orr said a gloomy international outlook would keep it above the target band.
"Inflation pressures have broadened and measures of core inflation have increased," he said.
"Nevertheless, inflation is expected to return to the Committee's one to three per cent target range by the middle of 2024."
Mr Orr cited dampening prospects for growth and upward pressures on commodity prices due to Russia's invasion of Ukraine in the RBNZ's judgment.
The August projections blow out previous predictions of how long high inflation would persist.
The bank has also predicted a higher unemployment rate than its previous forecasts - though still low by historical standards.
Currently at a basement 3.3 per cent, the jobless rate is tipped to rise to 4.5 per cent by the end of next year, topping out at five per cent in 2025.