RBNZ to Consult Public Twice This Year on Monetary Policy Remit
(Bloomberg) -- New Zealand's central bank plans to undertake two rounds of public consultation on its monetary policy remit this year before proposing any changes to Finance Minister Grant Robertson in 2023.
The Reserve Bank also considers it appropriate to consult other political parties on the remit, which defines the Monetary Policy Committee's price stability and employment goals. Those goals are currently to aim for 2% inflation and support maximum sustainable employment.
Under its new legislation, the RBNZ must consult with the public on the remit and provide advice to the minister on possible revisions before it is renewed every five years. That wasn't the case with the previous policy targets agreement, which the remit replaced in 2019.
The current remit is due to expire on Feb. 13, 2024, and the bank is required to provide advice to the minister no later than Nov. 13, 2023.
“In preparation for this advice, we have begun reviewing the current remit and will be consulting the public in two stages during 2022,” the RBNZ says in a document on its website.
In the first stage, commencing in June, the RBNZ will ask for feedback on “any changes you think could better support the wellbeing of New Zealanders both now, and through whatever economic shocks and changes may come our way.”
The central bank will run a survey on its website asking the public “to vote on a range of different scenarios about inflation and unemployment, based on how these affect their everyday lives.”
In the second stage, starting in October, the RBNZ “will consult on specific options for changes to the operational framework for monetary policy.”
| Read more: |
|---|
New RBNZ Act Clears Parliament, Paving Way For Governance Board RBNZ Would Lose Dual Mandate If Opposition Wins 2023 Election Government Told New RBNZ Remit Lacks Housing Impact, Emails Show |
The timing and topics for consultation appear to have changed from an initial plan put to Robertson in December.
In a Dec. 9 document released to Bloomberg under the Official Information Act, the RBNZ proposed holding the first phase of public consultation in April and May and said it would focus on “the purpose of monetary policy, what it can and cannot achieve, and policy lessons from the current remit period.”
2023 Election
In that document, the bank proposes delivering its advice to Robertson in March 2023, saying this would “provide you sufficient time to consider the advice and decide on amending, replacing or retaining the MPC remit before the 2023 election.”
The advice could alternatively be delivered in October 2023, but this would be during a pre-election period and the decision on any amendments “would likely not be made until after a new government is formed,” the RBNZ says.
“The bank also considers it appropriate and beneficial to consult other political parties on the MPC remit advice in order to build enduring support and confidence in the monetary policy framework,” it says.
The main opposition National Party has said it would strip the RBNZ of its dual mandate if it wins the 2023 election and have the central bank return to a sole focus on inflation.
The final decision on the remit is made by the minister alone -- another difference from the policy targets agreement, which was negotiated with the RBNZ governor.
Robertson has already changed the remit despite RBNZ objections, adding a requirement for the bank to assess the effect of its interest-rate decisions on the government's housing policy.
©2022 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
