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New Zealand raises benchmark interest rate to 3.5 percent as economy grows at healthy pace

New Zealand has raised its benchmark interest rate for the fourth time this year, to 3.5 percent.

The central bank on Thursday said it expects the economy to grow at a healthy annual rate of 3.7 percent this year, driven by construction in the city of Christchurch, which is rebuilding after a devastating earthquake three years ago.

New Zealand's program of rate hikes is unusual among developed nations. Most are keeping rates at or near record lows as they try to encourage growth following the 2008 global economic downturn.

The bank raised its rate by 0.25 percent for the fourth straight time.

New Zealand Reserve Bank Governor Graeme Wheeler says in a statement that inflation remains moderate. He says there would be an assessment period before any future rate hikes.