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Annual report 2022


Read our Governor's statement and download a PDF of our annual report for the 12 months ending 30 June 2022.

Reserve Bank of New Zealand

Annual report 2022
Annual report 2022

Read our Governor's statement and download a PDF of our annual report for the 12 months ending 30 June 2022.

We are pleased to have published our Annual Report for 2021 to 2022.

During the past year, we remained focused on supporting New Zealand’s economic recovery through the COVID-19 pandemic.

While the global and domestic economic environment remains challenging, including ongoing inflationary pressures, we progressed core areas of work to support New Zealand’s financial stability.

The year at a glance

He tirohanga o tēnei tau

7.3% inflation icon


Consumer price inflation is at 7.3% as at June 2022 - above the 1% to 3% target band.

Find out more about inflation

3.3% unemployment rate

Unemployment rate

The unemployment rate is 3.3%. The Monetary Policy Committee noted employment is above its maximum sustainable level.

Financial stability icon

Financial stability

Financial institutions remain sound. Our 2021 stress test showed New Zealand’s banking system has a stronger level of resilience than a year ago.

Read our Financial Stability Report

Bank notes icon

Bank notes and coins

Banknotes and coins in circulation were up by $0.8 billion (to $9 billion) during 2021 to 2022.

Find out more about New Zealand's banknotes and coins

NZClear icon


Availability of our clearing and settlement service NZClear provides trust and confidence in New Zealand's financial system.

ESAS icon

Exchange Settlement Account System (ESAS)

Availability of our payments and settlements system ESAS provides trust and confidence in New Zealand's financial system

Cash in circulation icon

Cash in circulation

$9 billion cash in circulation.

Official Cash Rate icon

Official Cash Rate (OCR)

The Monetary Policy Committee (MPC) raised the OCR from a low of 0.25% to 3% (2% as at 30 June 2022). The OCR changed to 3.5% on 5 October 2022.

Find out more about the OCR

RBA calendar icon

Founding legislation

On 1 July 2022, we welcomed our foundational legislation the Reserve Bank of New Zealand Act 2021.

Read more about the Act

Relationship Charter survey icon

2022 Relationship Charter Survey

93% of bank participants rated the Reserve Bank as ‘good’ or ‘very good’ in our 2022 Relationship Charter survey.

We have assisted in delivering a sound and efficient financial system, a robust and fit-for-purpose payment and settlement systems and money and cash availability for New Zealand’s needs.

Adrian Orr, Governor of the Reserve Bank of New Zealand

Governor’s statement

Te Whakapuaki a Te Kāwana

Kia orana tātou kātoatoa, tēnā tātou katoa

We have played a vital supporting role in New Zealand’s economic recovery through the COVID-19 pandemic. The financial system remains sound. Our policy actions have contributed to a strong labour market, and resilient household balance sheets. 

However, the interaction of strong demand and supply-chain disruptions over the past year has seen inflation rise in New Zealand and around the world, to levels well above central bank targets. Inflation is both a global issue and a domestic problem. 

The Russian invasion of Ukraine at the start of 2022 sparked a sharp increase in global fuel and food costs, adding to already elevated inflation globally. International trade patterns have been disrupted by the Ukraine war and COVID-19-related lockdowns in major Chinese cities, adding to ongoing production and trade bottlenecks. In response to high inflation, central banks around the world have been raising their interest rates, often at pace. These global events have all contributed to periods of significant volatility in financial markets, adding to the challenging economic environment. 

In New Zealand, we have remained in a period of radical uncertainty. During the past year, we have experienced national and regional lockdowns. Our border has only recently been reopened to international visitors. And although we are learning to live with COVID-19 in Aotearoa New Zealand, the health, social and economic challenges of the pandemic persist. 

Ongoing illness has made a tight labour market even tighter over winter, and created significant disruption for all New Zealanders. Labour shortages remain one of the biggest constraints for businesses across the country. Reported worker shortages and increasing wage growth are some of many indicators that suggest employment is above its maximum sustainable level. 

Monetary policy actions taken today cannot control the current rate of inflation. It takes time for interest rates to affect the economy. This is why the monetary policy Remit instructs us to keep future annual inflation between 1% and 3% over the medium term, with a focus on 2%. Consistent with our Remit, we have taken action to reduce future demand growth in New Zealand so that labour supply can catch up with labour demand, and to reduce domestic inflation over the medium term. We ended the programme of buying Government Bonds from July last year, and began increasing the Official Cash Rate (OCR) in October 2021.

There is more work to do. Increasing the OCR is the most effective way we can reduce inflation and support maximum sustainable employment over the coming years, consistent with our monetary policy Remit. That is one of our key roles as a central bank and the best thing we can do for the long-term economic well-being of all New Zealanders.

While the global and domestic economic environment remains challenging, I am pleased to report we are also meeting our other ongoing objectives and continue to grow our capability and capacity to respond to new challenges and unexpected events. 

We have assisted in delivering: 

  • a sound and efficient financial system
  • robust and fit-for-purpose payment and settlement systems
  • money and cash availability for New Zealand’s needs.

Our objectives have been delivered despite unexpected challenges and a rapidly evolving operating environment. 

The additional monetary policy tools we introduced at the start of the COVID-19 pandemic to lower interest rates and support market functioning are now being unwound. 

We stopped buying Government Bonds under the Large Scale Asset Purchase (LSAP) programme in July 2021, and in February 2022 decided to start selling the bonds back. Sales commenced in July 2022, and we intend to reduce holdings to zero by mid-2027. 

The Funding for Lending Programme (FLP), provided to banks at the OCR, is also coming to an end. Initial allocations closed in June 2022 and additional allocations will end in December 2022. 

These tools enlarged our balance sheet to $93.9 billion, however, the related risks were offset through the provision of high-quality collateral and an indemnity from the Crown. 

The responses to the pandemic and lessons of the past year will shape future responses. The decisions to cut the OCR to near zero and introduce the LSAP programme and FLP are being considered in an assessment of our monetary policy response to COVID-19. This is part of our legislated 5-yearly review of our monetary policy Remit, currently underway. 

Alongside this, we have continued to deliver against ongoing expectations, such as by: 

  • engaging with industry and key forums such as the Council of Financial Regulators (CoFR) and facilitating more than 100 speaking engagements in New Zealand and overseas to deepen our connections with stakeholders
  • incorporating sustainability in our decision-making under our financial stability objective and through our decision-making committees. Our research work culminated in a keynote speech ‘Housing (Still) Matters — The Big Picture’, with more research to come on this subject
  • consulting on the merits and potential design of 2 proposed debt serviceability restrictions
  • responding to societal challenges by launching a work programme to better understand Māori access to capital in the New Zealand economy
  • taking action to understand and mitigate the risks of climate change to financial stability.

We have made continued progress on our transformation as per our 5-year funding agreement signed with the Minister of Finance in June 2020. This agreement enables us to invest in people, capability and capacity so we can sustain a central bank that is fit for the future. 

I would like to thank our Minister, Hon Grant Robertson, and our previous Advisory Board and Transitional Board for their support and guidance during this challenging year.

I would also like to thank members of the MPC — especially our non-executive colleagues Bob, Caroline and Peter — for their excellent insight, constructive challenge, and collegiality through ongoing challenging economic times. 

Finally, I would also like to extend my deepest thanks to the people of Te Pūtea Matua – for your commitment, effort and determination in supporting all New Zealanders during yet another difficult year.

Noho ora mai

Adrian Orr, Governor

22 September 2022