Statement of Intent 1 July 2019 - 30 June 2022
We are at a pivotal point in the history of the Reserve Bank. We are operating against a backdrop of significant change – both culturally as an institution, and in the government’s expectations of us and our performance as a central bank. We continue to build our capability to respond to, lead and influence our rapidly changing environment.
We want to be a Great Team and the Best Central Bank. To get there we need to review the way we operate, the way we engage and the way we think about and deliver our core responsibilities. This includes operating to the extent of our legislative mandate, taking a long-term view in all our policy work, embracing innovation and inclusiveness, and being influential on the broader challenges that affect the people of New Zealand.
Our work has a big impact on the lives of all New Zealanders, and we carry that responsibility with pride. Our goal is a big one and enshrined in our statute: to promote the prosperity and wellbeing of New Zealanders, and contribute to a sustainable and productive economy. We do this so that we, and the generations who follow, can enjoy this great country we live in.
As New Zealand’s central bank, we talk regularly with decision makers in government, participants in the financial system, and our broader stakeholders, who include the public. With their input, we set the key policies that enable us to do our work.
We have four main jobs to help keep New Zealand’s monetary system sound, efficient and dynamic.
First, we are the sole provider to the public of New Zealand’s currency. We are responsible for ensuring that the cash operating model is reliable, efficient and flexible, and meets the immediate needs of the public and the longer-term needs of our society.
Second, we keep inflation in check and support maximum sustainable employment through sound monetary policy. In fulfilling this dual monetary policy mandate, we aim to preserve the purchasing power of our currency, giving New Zealanders the confidence to chart their own course.
Third, we promote a sound, efficient and dynamic financial system. We use our balance sheet to support the implementation of monetary policy and to ensure the smooth functioning of the banking system on a day-to-day basis and in times of crisis. We set and enforce the rules for banks, insurance companies and other financial institutions and help to stop illegal activities, like money laundering and terrorist financing that can undermine the financial system.
Finally, we oversee and operate New Zealand’s wholesale payment and settlement systems to support day-to-day financial transactions in the economy.
The completion of the review of our legislation over the next year will ensure that we have a sustainable, modern and fit-for-purpose framework to support our responsibilities. The first phase of this review saw the establishment of a new Monetary Policy Committee, which is responsible for our dual mandate of keeping consumer price inflation low and stable, and supporting maximum sustainable employment. The second phase will address aspects such as our role in financial policy and how we are governed. It is a broad-ranging review with final decisions not expected until late 2020. We expect that our strategy over the medium term will need to flex and change in response to those decisions.
We are also renewing our international engagement strategy to give greater focus to New Zealand’s bilateral and multilateral engagements. We are working on our contribution to building capacity and capability in central banks throughout our region – including the central banks of the South Pacific and East Asia.
Financial inclusion is a key driver for our work and we remain focused on the impacts of our policies on the more vulnerable sections of our society and on our region.
Underscoring our need to be a good global citizen, we have embarked on our climate change strategy, playing our part in the link between necessary global climate action and the role of the financial system.
It’s a complex and changing global landscape in which we operate, but we are acutely conscious of our heritage and history. Our Te Ao Māori Strategy is designed to ensure a higher degree of cultural awareness internally and externally, and the building of a more culturally diverse and inclusive central bank.
Our vision is to be the Best Central Bank, with a Great Team. So we will continue to steer our course with care, preparing for what is on the horizon and ensuring that we are well equipped to deliver on our commitments.
12 June 2019