The RNZ Business article posted online Feb 25 at 2:29, says, “the governor of the RBNZ Adrian Orr said oil prices had been the most notable driver of inflation pressure for New Zealand…” If it is, then the aggregate supply curve shifted up to the left, reduced real output (% – 0.3 in Sep 2021), and increased inflation (% + 5.9 in Sep 2021). Based on this one actual observation, perhaps, the governor responded by raising the interest rate 50 basis points, which intends to reduce demand and real output by more than the adverse oil shock already did, in order to reduce inflation. This policy is very harsh and contractionary. Monetary policy should be forward-looking; it takes time to affect output and prices. Oil prices are highly variable and impossible to forecast. More so with uncertainty rising because of high tension in the energy regions. If the price of oil falls, we will be saved. If it goes up, and the RBNZ tightens more as it says it would, New Zealanders will be in trouble. A better policy is to withdraw excess cash from the economy. There is an excess money supply of money in New Zealand. Broad money has a continuing positive trend and the monetary base has spiked because of the government’s COVID fiscal stimulus.