A government-commissioned independent review has found that the Reserve Bank of New Zealand's monetary policy response to the Covid-19 pandemic started well but remained in place far too long, contributing to a 32-year inflation high of 7.3%. The two external reviewers make 12 recommendations aimed at tightening decision-making frameworks and reducing reliance on discretion. The findings have drawn sharp political divisions over the timing of the review's release and the future of the Reserve Bank's dual mandate.
Reserve Bank of New Zealand Governor Anna Breman has cautioned that near-term inflation may come in higher than the Bank projected in its September monetary policy statement, if recent global oil price rises are sustained. Breman made the remarks during a visit to Dunedin, where she also noted the economic recovery remains uneven across New Zealand. The Official Cash Rate is due for review in late October.
