Economy

Reserve Bank Act to be reviewed

Reserve Bank Act to be reviewed”

New Zealand Finance Minister Grant Robertson confirmed on Tuesday that the country's new coalition government is proceeding with a review of its central bank act to include maximising employment as a goal.

Mr Robertson doesn't intend having a specific percentage target for unemployment.

Robertson announced the government would shortly announce an independent expert review panel to study the current monetary and financial stability practices of the RBNZ in a two-phase process that will first insert an employment focus into the PTA and implement monetary policy decision-making by committee rather than vesting that responsibility in the governor alone.

The move comes ahead of Thursday's Monetary Policy Statement, the first full review of the state of the economy and inflationary pressure since before the September 23 election and the September 30 retirement of the previous RBNZ governor, Graeme Wheeler.

The current 1-3 per cent inflation target band would be retained. But he was not the one who would make those decisions, which were up to the independent central bank.

Robertson said the operational independence of the bank would remain, and he did not accept that broadening its objectives would make inflation rises more likely.

The finance minister wants to "codify that" and bring some external voices to the table that will help improve the decisionmaking process.

"In addition, the review will consider whether changes are required to the role of the Reserve Bank board as a outcome of the alterations to the decision making model".

In phase two, the Reserve Bank and Treasury will work together to "produce a list of areas where further investigations of the bank's activities may be desirable".

Mr Robertson hadn't seen Ian Rennie's report into the Reserve Bank, which was commissioned by outgoing Finance Minister Steven Joyce, but said he looks forward to receiving it. This list and the next review stages will also be made public early in 2018.

Robertson said the current Reserve Bank Act was 30 years old and while it had served the country well in general, now was the time to ensure it was still the most effective and efficient model.

The first phase of the review process would also review "whether changes are required to the role of the Reserve Bank board as a effect of alterations to the decision-making model".

"The Reserve Bank has been subject to several reviews in the past".

Robertson told reporters there was no desire to have the New Zealand dollar included in the review.

Mr Robertson suggests if mandating full employment had been included in the policy-making framework when the Reserve Bank was increasing the official cash rate in 2014, it "might have influenced a different decision".



Like this

loading...
loading...

Latest


07 November 2017
Are Analysts Bullish about General Motors Company (NYSE:GM) after last week?
Instinet now has $43.00 price target on the auto manufacturer's stock, up from their previous price target of $42.90. The stock has a market cap of $49,097.65, a price-to-earnings ratio of 7.36, a PEG ratio of 0.64 and a beta of 1.24.

07 November 2017
Bon-Ton delisted from NASDAQ; stock trading over the counter this week
Chesapeake Energy Corporation (NYSE:CHK) shares are gapping higher 1.60% pre-market with a price of $3.79 on the stock. Analysts, on average, seem bearish as they suggest BONT is worth $-0.63 less, giving a target price of $0 a share.

07 November 2017
Stop Kashmir talk in your parliament, India tells UK
New Delhi made it clear to the British delegation that Kashmir is an integral part of India and such activities should be checked. Rijiju said that the Kashmir issue was being raised in the British parliament at the behest of some MPs of Pakistan origin.

07 November 2017
What Are Analysts Report About Nabors Industries Ltd. (NBR)
BidaskClub downgraded Nabors Industries from a sell rating to a strong sell rating in a research report on Friday, July 28th. Over the last three months, the shares of the company have changed -16.31% and performed -39.80% over the last six months.

07 November 2017
Elton John sings at 20th anniversary 'Lion King' show
The newly-announced cast list includes Beyoncé as Nala, Donald Glover as Simba and James Earl Jones reprising his role as Mufasa. Elton John surprised the audience at a performance of Broadway's The Lion King celebrating the show's 20 years on Broadway.

07 November 2017
After church shooting, more prayers, more calls for more guns | Letters
What happened yesterday in Sutherland Springs, however, wasn't just another mass shooting with a larger count of wounded and dead. When it comes to stopping gun violence, a more responsible citizenry is the answer, not more government-imposed mandates.

07 November 2017
No, You Can't Run on Miami's Airport Tarmac
It is now unknown whether the man was carrying a weapon, but the Herald's source finds the incident "very concerning" either way. An unidentified man at the Miami International Airport sneaked past a checkpoint on a conveyor belt intended for luggage.

07 November 2017
Bill Belichick explains Patriots' decision to sign Brian Hoyer
I love playing for this team and I've tried to do it for a long time and I have done it for a long time. Show up every day with a good positive attitude, try and lead the team and we try and win games.

07 November 2017
Several Apple Watch Series 3 devices crashed when asked about the weather
However, specialists argue that the Apple Watch did not have such a problem in previous years. Hence, the wristwear stopped functioning and the springboard interface restarted.

07 November 2017
Market Tracker: Following Shares of Russell 2000 Value Ishares (IWN)
A certain stock may be considered to be on an uptrend if trading above a moving average and the average is sloping upward. Davis R M Inc.'s holdings in iShares Russell 1000 Growth Index were worth $872,000 at the end of the most recent quarter.