Reserve Bank Bulletin released
The Reserve Bank today released the December 2013 edition of the Reserve Bank Bulletin.
The Bulletin's first article looks at the Policy Targets Agreement in light of the changes introduced in 2012. These changes continue an evolution in New Zealand's flexible approach to inflation targeting.
The Bulletin's second article covers the role of macro-prudential indicators in the measurement of systemic risk. The article outlines some of the key indicators the Reserve Bank uses to help inform macro-prudential policy decisions. These indicators help identify financial system risk and assist us to assess the banking system's capacity to weather periods of financial stress. The article includes an explanation of how macro-prudential indicators helped to frame the decision to impose residential mortgage loan-to-value (LVR) restrictions.
The Bulletin's third article examines recent trends in global and local foreign exchange markets. It looks at various factors that influence the volume, and location, of trading in particular currencies, including the New Zealand dollar. Foreign exchange turnover continued to increase in 2013, with the US dollar remaining the most-traded currency.
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