Monetary Policy

New Zealand’s monetary policy is operated by the Reserve Bank of New Zealand (New Zealand’s central bank). The Reserve Bank is required to formulate and implement monetary policy.

Under current policy the Reserve Bank has a dual mandate: to maintain price stability by keeping inflation between 1% and 3%, and to support full employment.

In March 2020, as part of the wider Covid-19 economic response package, the Reserve Bank dropped the Official Cash Rate (from 1.00%) to 0.25%. It is likely to remain at that level until at least March 2021. The Treasury acts as the New Zealand government’s principal adviser on financial and economic issues.

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