1 Feb 2012

Re-think of monetary policy urged

5:32 am on 1 February 2012

Some economists and analysts are calling for the Government to re-think its monetary policy and the way it is conducted following the departure of Reserve Bank Governor Alan Bollard.

Dr Bollard is to step down in September after a decade in the post.


BERL chief economist Ganesh Nana says the changing of the guard should be an opportunity to overhaul monetary policy.

He wants to see Government departments playing a much stronger role in managing the economy, particularly in monitoring exports.

Dr Nana says the focus on lowering inflation through interest rates, has not served New Zealand well, and it should follow the lead of countries like Singapore and Switzerland, which use other ways to control their economies.

Business commentator Brian Gaynor says the governor's role should be widened to include responsibility for achieving a certain level of economic growth, and lowering unemployment.

However, Dr Bollard's predecessor, Don Brash, says the Reserve Bank should stick to keeping inflation under control.

Currency market analyst Derek Rankin says the job should be changed so that a committee makes decisions on the Official Cash Rate rather than the governor alone.