The Reserve Bank of New Zealand (RBNZ) increased its cash rate by a quarter of a percentage point to 0.5%.
New Zealand is one of the first developed economies to reverse rate cuts put in place during the pandemic.
The RBNZ also said it plans to remove more stimulus measures as the economy continues to recover.
In August, South Korea became the first major Asian economy to raise interest rates since the coronavirus pandemic began.
The Bank of Korea increased its base rate of interest from a record low of 0.5% to 0.75%.
The move was aimed at helping curb the country’s household debt and home prices, which soared in recent months.
