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Behind the scenes of an OCR decision in New Zealand

Adam Richardson

Seven times a year, the Bank makes a decision on the appropriate setting for the Official Cash Rate (OCR). When making OCR decisions, the Bank uses a system that promotes sound decision making, to help achieve the goals of the Policy Targets Agreement. A robust system is needed to address the inherent uncertainty the Bank faces when making monetary policy decisions. This paper outlines this system in detail by highlighting how the Bank reaches a decision on the appropriate setting of the OCR and the publication of a Monetary Policy Statement.