Reserve Bank Bulletin released

Release date
26 September 2013

The Reserve Bank today released the September 2013 edition of the Reserve Bank Bulletin.

The Bulletin's first article looks at why inflation in New Zealand has been surprisingly low for the past 18 months, even though GDP growth has been much as expected. The article concludes that the unexpected strength in the exchange rate, reinforcing strong competitive pressures, has played a key role. Encouraging declines in inflation expectations and low wage inflation have also contributed.

The Bulletin's second article outlines the Reserve Bank's new macro-prudential policy framework and the governance arrangements surrounding it. The article provides background to the development of macro-prudential policy, explains the objectives, and describes the four macro-prudential tools that the Reserve Bank can use. The article notes that the macro-prudential approach is still in its early stage and there is scope to refine it in light of domestic and international experience.

The Bulletin's third article outlines some of the approaches used to help reach a position on how much capital the Reserve Bank needs to underpin its financial operations. Recent changes in methodology improve the robustness of estimated capital needs and increase the transparency of the framework.

Media contact:
Angus Barclay
External Communications Adviser
Ph 04 471 3698, angus.barclay@rbnz.govt.nz