The official cash rate one year on

Release date
Vol. 63. No. 2. June 2000
Andy Brookes; Tim Hampton
Main file
In March 1999 the Reserve Bank changed the way monetary policy is implemented in New Zealand, introducing the Official Cash Rate system. This article reviews the new regime one year on and concludes that it appears to be working well so far, fulfilling the Bank’s aims that it be effective, simple, transparent and efficient. Financial market behaviour has been affected by the change, with markedly reduced volatility in short-term interest rates.