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Annual Report 2023


Read our annual report for the 12 months ending 30 June 2023.

The Reserve Bank of New Zealand | Te Pūtea Matua

Annual Report 2023
Annual Report 2023

Read our annual report for the 12 months ending 30 June 2023.

The year at a glance

He tirohanga o tēnei tau


Inflation icon


Consumer price inflation was at 6% in June 2023 – above the 1% to 3% target band.

Find out more about inflation

Unemployment icon

Unemployment rate

The unemployment rate was 3.6%. The Monetary Policy Committee in June 2023 noted employment is above its maximum sustainable level.

See our latest labour market statistics

Financial stability icon

Financial stability

New Zealand's financial system remains sound, with banks’ capital levels strengthening ahead of increasing regulatory requirements.

The banking system and our largest insurers remain resilient to various downturn scenarios, as demonstrated by our regular stress testing programme.

Read our Financial Stability Report

Banknotes and coins icon

Banknotes and coins

Banknotes and coins in circulation went down by $0.06 billion (to $8.92 billion) in the year to 30 June 2023.

Currency in circulation is influenced by public demand for cash, which is impacted by several factors including changing payment and shopping preferences and reduced access to bank branches for cash services for individual and retail customers.

Find out more about New Zealand's banknotes and coins

NZClear combination icon


The availability of our clearing and settlement service NZClear was 99.91% (up 0.01%), and the average daily transaction values was $7.1 billion (up $1.8 billion). NZClear provides trust and confidence in New Zealand's financial system.

Find out more about NZClear

ESAS combination icon

Exchange Settlement Account System (ESAS)

The availability of our payments and settlements system ESAS was 100%, and the average daily transaction values was $36.3 billion (up $2.8 billion). ESAS provides trust and confidence in New Zealand's financial system.

Find out more about ESAS

OCR coin icon

Official Cash Rate (OCR)

The MPC raised the OCR from 2% (as at 30 June 2022) to 5.5% (as at June 2023).

Find out more about the OCR

We released our five-yearly review of monetary policy

The review found that our formulation of monetary policy from 2017 to 2022 was consistent with the objectives set out in our Remit. There were 9 areas identified for improvement. The lessons and areas of focus are informing our policy design, our capability building and our research agenda.

Find out more about our review of monetary policy

Deposit Takers Bill icon

The Deposit Takers Bill

The Deposit Takers Bill was introduced to Parliament in September 2022 and the Deposit Takers Act received Royal Assent on 6 July 2023.

This legislation provides for a single regulatory regime for all deposit takers and introduces a Depositor Compensation Scheme so depositors can have confidence that their deposits, in the event of a deposit taker failure, are eligible for compensation up to $100,000 per depositor, per institution.

Find out more about the Deposit Takers Act

Whare icon

We published the Foreign Reserves Management and Coordination Framework in January 2023

Read the Framework

We continue to engage with others, such as through the Council of Financial Regulators, to encourage improved financial inclusion and Māori access to capital, and the understanding and mitigation of risks to the financial system from climate change.

Governor’s statement

Te Whakapuaki a Te Kāwana

This report sets out the activities and achievements of the Reserve Bank of New Zealand – Te Pūtea Matua during the 2022/23 year.

This was our first year of operating under the new RBNZ Act 2021, and our new accountability documents:

  • the Statement of Performance Expectations (SPE)
  • Statement of Prudential Policy, and
  • Statement of Financial Risk Management, alongside our Statement of Intent (2022-2026) (SOI).

These documents set out how we approach our work, what we aim to achieve and how our performance is measured.

Our first audited Statement of Performance against those expectations is included in this Annual Report.

RBNZ team members reading report in office

In the 2022/23 financial year, the Reserve Bank continued to operate in a complex and challenging economic environment, with significant inflationary pressures domestically and internationally, together with labour shortages and volatility in financial markets. The effects of major disruptions to the global economy – due to the COVID-19 pandemic, war and geopolitics, climate change and associated policy responses – continued to be felt. Many of my central banking colleagues around the world faced similar challenges. I remain of the view that New Zealand has weathered this period of economic uncertainty more successfully than many others.

We continued to reinforce and strengthen our relationships with the other agencies on the Council of Financial Regulators and our overseas counterparts, including the Reserve Bank of Australia and the Australian Prudential Regulation Authority. We also deepened our relationship with the Treasury through its new role as our monitoring agency under the RBNZ Act 2021, providing additional oversight of the activities outlined in our SOI and SPE. 

Over the course of the year the Monetary Policy Committee (MPC) increased the Official Cash Rate (OCR) from 2% to 5.5%. This was the most rapid increase in the Reserve Bank’s history. The effects of this are flowing through as anticipated to our economy. The OCR will need to stay at restrictive levels for the foreseeable future to ensure annual consumer price inflation returns to our 1% to 3% target range, while supporting maximum sustainable employment.

A major achievement during the year was the completion of our first formal Review and Assessment of the Formulation and Implementation of Monetary Policy (RAFIMP). The review covered how we made decisions about monetary policy in the 5 years from 2017 to 2022 and how those decisions were brought into effect.

We provided advice to the Minister of Finance on the MPC’s Remit. This advice was informed by feedback from two public consultations, findings from surveys and public workshops, and relevant analyses of key monetary policy issues. The review found that the current approach of flexible inflation targeting with a medium-term focus remains the most appropriate framework for New Zealand. As a consequence of this work, the Minister issued a new remit and the MPC and the Minister agreed to a new Charter. The changes to the MPC Remit provide more clarity for the monetary policy objectives.

The increasing-interest-rate environment exposed some fragilities in the global financial system, particularly where risks had been inadequately managed. New Zealand households and businesses faced increased debt-servicing costs as their borrowing repriced to higher interest rates. However, there have been limited signs to date of distress in banks’ lending portfolios.

Last year was a significant one for the profound ongoing shift in our approach to regulating entities and supervising regulated entities. A major focus was on the progress of the Deposit Takers Bill. We achieved a major milestone just after the end of this financial year with the enactment of the Deposit Takers Act. The new legislation will transform our approach to the regulation of banks and other deposit takers, and introduce the Depositor Compensation Scheme. There are many years of work ahead to implement this legislation and make sure the new regime works well.

In conjunction with the Financial Markets Authority, we also made significant progress on the regime for financial market infrastructures, and the new standards that have since been published. Our review of our insurance legislation continues, and we have published a new interim solvency standard.

HM Queen Elizabeth II passed away last September, after more than 70 years on the throne. We marked this sad moment with a display at our Wellington head office of the bank notes on which the late Queen is depicted.

The northern and eastern parts of New Zealand suffered extreme weather events in January and February. The consequent disruption highlighted one of our fundamental responsibilities – the supply of cash – and we worked hard with other agencies to secure the continued distribution of notes and coins throughout the affected regions. The resilience of the cash system remains a key concern for us, and an area of policy and operational focus. 

As the Chair says in his report, we have worked hard during the year to operationalise the new governance structure. This has been a significant undertaking, but it has enabled us to maximise the advantages of our new corporate structure. I am grateful for the support shown by the Board Chair and the other Board members.

The Reserve Bank’s modernisation and transformation into ‘great team, best central bank’ continued, with good progress made on leadership development, diversity, equity and inclusion and employee wellbeing. We continued to modernise our workplace and support our staff with a refreshed information and data-management strategy, and IT systems. This will ensure that the Reserve Bank remains a strong and effective central bank, well placed to continue to perform our critical role in achieving our price stability and financial stability objectives.

I am proud of all the work that all the staff in the Reserve Bank have undertaken throughout the year.

Adrian Orr

22 September 2023


Read sections of our Annual Report 2023


Download our Annual Report 2023