The decision was in line with expectations, and it marked the third straight meeting in which the RBNZ has hiked the OCR.
It followed 24 straight meetings in which the rate was not changed.
The central bank trimmed rates by 50 basis points in
The RBNZ had plainly said it would begin raising the rate in early 2014, since it was pleased with the rate of recovery.
The bank also wishes to keep overall inflation close to its target of 2.0%; in 2013, CPI was up 1.6% and trending to the upside.
"Headline inflation remains moderate and tradables inflation is expected to be low for some time. However, above-trend growth has been absorbing spare capacity and adding pressure to non-tradables inflation. These pressures are particularly evident in construction cost increases," Wheeler said.
Wheeler also suggested that the bank is not finished with rate hikes - although the pace of the increase will be determined by the trend of economic data.
"The speed and extent to which the OCR will need to rise will depend on future economic and financial data, and its implications for inflationary pressures. By increasing the OCR as needed to keep future average inflation near the 2% target mid-point, the Bank is seeking to ensure that the economic expansion can be sustained," Wheeler said.
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