About monetary policy

The Reserve Bank uses monetary policy to control inflation and keep it within a specific target band. Find out about how the Reserve Bank uses and implements monetary policy to maintain price stability.

Amendments to New Zealand’s monetary policy framework will come into effect on 1st April 2019. The remit, charter and code of conduct are key components of the new framework. The remit provides the Monetary Policy Committee (MPC) with its operational objectives, consistent with the economic objectives in Section 8 of the Reserve Bank of New Zealand Act (1989).

The MPC will also be bound by the MPC charter and code of conduct. The charter provides directions on decision making procedures, transparency and accountability. The code of conduct sets out minimum standards of ethical and professional conduct that must be adhered to by members of the MPC.

Our At a Glance series explains what you need to know about monetary policy. It also goes into detail on the RBNZ economic model and how our economy works, how the RBNZ forecasts projections, explains what the Monetary Policy Statement is and also how the RBNZ makes monetary policy decisions.

Introduction to monetary policy
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The Handbook explains the new framework and sets out key assumptions about how the economy operates, the contribution of monetary policy to New Zealand’s economy, and how to design processes to optimise the benefits provided by a legislated Monetary Policy Committee.
Thumbnail - Fact sheet - What is inflation?
Inflation and deflation in the New Zealand context.
Thumbnail - Fact sheet - What is the Official Cash Rate?
The Official Cash Rate (OCR) is an interest rate set by the Reserve Bank. It influences all other interest rates and is, in effect, the wholesale price of borrowing or lending money in New Zealand.
Implementing monetary policy
Submissions made by the Bank
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In August 2011 the Bank sent a submission to the Commerce Committee on the inquiry into housing affordability in New Zealand. The submission looks at trends in housing affordability, at the drivers of house prices and whether there are any areas that might warrant policy attention from government. it also includes background material and some policy suggestions.