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Monetary Policy Statement

The Monetary Policy Statement sets out how the Monetary Policy Committee will achieve its objectives. It has an assessment of current and projected future economic conditions, including inflation and employment.

The purpose of the Monetary Policy Statement

Each Monetary Policy Statement must set out:

  • the approach the Monetary Policy Committee (MPC) is taking to achieve its operational objectives defined in the remit

  • the MPC’s reasoning for adopting that approach
  • the transparency and accountability requirements of the MPC's charter:
    • explaining how the MPC has sought to meet the requirements of Section 2(2) of the remit
    • if inflation outcomes (and/or expected outcomes) are outside of the target range, explaining the reason for this

    • explaining how monetary policy is currently supporting maximum sustainable employment.

Read about the Monetary Policy Committee

How we prepare the Monetary Policy Statement

During the development of each MPS, our staff present initial forecasts that the Monetary Policy Committee (MPC) then discuss. The MPC has direct access to experts when forming its views.

Our staff amend the final forecasts following MPC's suggestions. The final monetary policy decision is based on the forecasts that have incorporated the MPC’s judgement. The MPC ultimately has ownership over the published forecasts.

We have published more information on how the MPS is put together and the role of our staff in our Bulletin series.

Read Effective monetary policy committee deliberation in New Zealand

Monetary Policy Reviews

Monetary Policy Reviews (MPRs) give an interim update on the monetary policy outlook and settings between each Monetary Policy Statement.

These were previously called OCR (Official Cash Rate) announcements. This was changed to Monetary Policy Review (MPR) announcements as of 23 June 2020. The new naming reflects the fact that alternative monetary policy tools can now also be used by the Monetary Policy Committee to maintain price stability and support maximum sustainable employment.

Unscheduled adjustments to the OCR may occur at other times in response to unexpected or sudden developments. To date this has occurred only twice – the first time following the 11 September 2001 attacks on the World Trade Centre in New York and more recently in response to the COVID 19 crisis.

Recent and upcoming MPS/MPR announcements