30 Nov 2022

Reserve Bank seeks public feedback as part of monetary policy review

11:53 am on 30 November 2022
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The Reserve Bank of New Zealand. Photo:

The public is being asked to consider whether New Zealand should have monthly inflation data like other advanced economies, as part of a review of the Reserve Bank's monetary policy.

The call for feedback on a range of issues, followed a recent review of the central bank's monetary policy decisions over the past five years, which indicated inflation would not be as high now, if it had acted sooner.

RBNZ manager of policy analysis Chris Bloor said the current monetary policy framework provided the Reserve Bank with what it needed to meet its objectives of price stability and maximum sustainable employment, but would benefit from some tweaks.

"We don't see that big changes [are] needed to the frameworks and we have the ability to do what we need to do to achieve price stability and maximum sustainable employment," he said.

However, feedback was needed on such issues as would it be better to have monthly inflation data, rather than rely on the quarterly consumer price index (CPI), issued every three months.

"All OECD countries, apart from New Zealand, do have some form of monthly CPI indicator. So if we had more timely data that would certainly support us and [help us with] making good monetary policy decisions," Bloor said.

Another item open for consideration was the balance between the central bank's dual mandate of meeting price stability and maximum sustainable employment.

"Within our framework at the moment, there is no priority given to either of those objectives, so it's left up to the Reserve Bank to decide how much priority each of those objectives are given," he said.

"We think there's some merit in considering whether the price stability objective should be given primacy over the maximum sustainable employment objective, and we're very much looking for the public's views on that."

He said the Reserve Bank was also interested in feedback on its requirement to assess the impact of monetary policy on house price sustainability.

"And we're interested in the public's views about whether that's appropriate as part of the monetary policy remit," Bloor said.

The Reserve Bank will be hosting zoom and in person workshops in Wellington next week about the discussion documents and other materials, which can be found on the RBNZ website.

The public have until 27 January to make a submission.

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