Reserve Bank issues Statement of Intent

Release date
03 July 2007

The Reserve Bank has released its Statement of Intent (SOI) for 2007-2010.

Reserve Bank Governor Alan Bollard said the SOI reflects the Bank's undertaking in its five-year Funding Agreement to renew its tools and systems to ensure it can deliver on its policy and operational goals in the face of significant change.

"As we have noted on a number of occasions, we are facing a challenging environment," Dr Bollard said. "We have seen the longest period of growth since 1968-75; the lowest unemployment rate in 20 years; sustained high commodity prices, especially for dairy; unprecedented access to international credit; and worldwide booms in housing and oil prices.

"The outcomes have surprised forecasters and markets. New Zealand households have taken to borrowing, investing in houses and general consumption to an extent never seen before.

"We are continuing to invest in upgrading our forecasting and policy tools, improving our understanding of household balance sheets, and improving the quality of our statistics. We have also reviewed and offered advice to Government on whether other tools could assist us in managing inflation."

Dr Bollard said the Bank is strengthening its analysis of risk in the financial sector. Its programme of systems renewal continues in this SOI: back-office systems that support the Bank's functions, such as the payments system, forecasting and data systems, web capability, financial reporting, document management.

For further information contact:
Mike Hannah
Head of Communications
Ph 04 4713671, 021 497418, mike.hannah@rbnz.govt.nz