After cutting the OCR to a low of 0.25% to help businesses and households survive initial Covid lockdowns, the RBNZ started lifting the rate again from October 2021.<\/p>\n
\u201cThe [Monetary Policy Committee\u2019s] strategy helped reduce inflation from its peak in 2022 and return it to within the 1 to 3% target band by September 2024,\u201d Conway said.<\/p>\n
\u201cThis strategy kept longer-term inflation expectations near the target midpoint, which is key to medium-term price stability.\u201d<\/p>\n
The 2022 Review and Assessment of the Formulation and Implementation of Monetary Policy proposed nine recommendations aimed at improving the Monetary Policy Committee\u2019s (MPC\u2019s) \u201cability to achieve its objectives in an environment of heightened uncertainty and more complex economic shocks\u201d, the RBNZ said in a statement.<\/p>\n
\u201cThe MPC has gained valuable insights into how economic activity, price setting by businesses, and inflation expectations evolve during periods of high inflation and economic volatility,\u201c Conway said.<\/p>\n
\u201cWe now have a deeper understanding of supply shocks and structural drivers of inflation and have expanded our use of high-frequency data for more timely and granular monitoring.\u201d<\/p>\n
The RBNZ had developed new tools to estimate neutral interest rates and run scenario analysis, he said.<\/p>\n
\u201cThese improvements ensure the MPC is well equipped to navigate future shocks while maintaining price stability.\u201d<\/p>\n
The accuracy of the Reserve Bank\u2019s economic forecasts had significantly improved, as economic disruptions from the pandemic had subsided, Conway said.<\/p>\n
\u201cCommunication of the MPC\u2019s strategy was generally clear, though with room for improvement, particularly in how the forward OCR track is conveyed.<\/p>\n
\u201cWe are consistently assessing our performance in maintaining low and stable inflation, which is the best contribution we can make to improving New Zealand\u2019s long-run economic performance.\u201d<\/p>\n
The work released today provided a useful interim update before the next full review scheduled for 2027, Conway said.<\/p>\n
Liam Dann is business editor-at-large for the NZ Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.<\/p>\n","protected":false},"excerpt":{"rendered":"After cutting the OCR to a low of 0.25% to help businesses and households survive initial Covid lockdowns,…\n","protected":false},"author":2,"featured_media":49286,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[28357,6450,16489,42772,1643,138,8607,71,305,1943,5978,29135,130,111,139,69,1523,5353,7254,13194,3227,42775,1336,10665,22704,5034,762,42774,42773,1865,1803],"class_list":["post-49285","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-28357","tag-6450","tag-admits","tag-aggressive","tag-bank","tag-business","tag-covid","tag-from","tag-have","tag-inflation","tag-might","tag-monetary","tag-more","tag-new-zealand","tag-newzealand","tag-nz","tag-over","tag-period","tag-policy","tag-progress","tag-published","tag-recommendations","tag-reduced","tag-reserve","tag-responding","tag-response","tag-review","tag-sooner","tag-tightening","tag-today","tag-update"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/49285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=49285"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/49285\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/49286"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=49285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=49285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=49285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}