Labour questions the political motivation of a review due to release findings six weeks out from an election. (Source: 1News)<\/p>\n
Willis said those actions helped save jobs and businesses, but came with significant consequences. Criticism has long been levelled at the Reserve Bank for its choices, which some blamed for a deeper economic rut in more recent times.<\/p>\n
“The purpose of the review is to learn from experience,” Willis said. “An independent review means the conclusions found can be objective and constructive.”<\/p>\n
The review was expected to finish in August and be released the following month.<\/p>\n
![\"Reserve](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/02\/reserve-bank-universally-expected-to-cut-ocr-rate-to-3percen-U7425DOAIZAZNMD7SKOVOW64UI.png\")
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Reserve Bank (file image) (Source: Breakfast)<\/p>\n
Willis said the review would identify lessons, “New Zealand could learn to improve the monetary policy response to future major events”.<\/p>\n
Willis said: \u201cThe Reserve Bank took unprecedented action in response to the Covid-19 pandemic. This included reducing the OCR to 0.25% and the use of additional monetary policy tools, including a large-scale asset purchase (LSAP) programme.<\/p>\n
“These actions helped to preserve jobs and keep businesses afloat, but the indirect impacts included decades-high inflation, and losses of about $10.3 billion on the LSAP programme and a significant spike in asset values with house prices increasing 30% in one year.”<\/p>\n
Government announcements blanketed the airwaves after the lockdown was announced. (Source: Supplied)<\/p>\n
LSAP was a form of bond-buying, also known as quantitative easing, and which is colloquially referred to as money-printing.<\/p>\n
The review will focus on decisions by the monetary policy committee, which sets interest rates, and on Reserve Bank analysis provided to support those decisions. <\/p>\n
This includes monetary policy committee decision-making and communication, the use of additional monetary policy tools, and the coordination of monetary and fiscal policy.<\/p>\n
Who will lead the review?<\/p>\n
Athanasios Orphanides and David Archer have been appointed to conduct the review. Orphanides was a former governor of the Central Bank of Cyprus and member of the Governing Council of the European Central Bank, and a professor of the Practice of Global Economics and Management at the Massachusetts Institute of Technology.<\/p>\n
Archer was a former NZ Reserve Bank assistant governor and former head of the Central Banking Studies Unit at the Bank for International Settlements.<\/p>\n
The official cash rate had been at a historic low during the pandemic before the Reserve Bank began rapidly hiking it in late 2021 to combat surging inflation.<\/p>\n