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Behind the scenes of an OCR decision in New Zealand

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Abstract

Seven times a year, the Bank makes a decision on the appropriate setting for the Official Cash Rate (OCR). When making OCR decisions, the Bank uses a system that promotes sound decision making, to help achieve the goals of the Policy Targets Agreement. A robust system is needed to address the inherent uncertainty the Bank faces when making monetary policy decisions. This paper outlines this system in detail by highlighting how the Bank reaches a decision on the appropriate setting of the OCR and the publication of a Monetary Policy Statement.

Suggested Citation

  • Adam Richardson, 2016. "Behind the scenes of an OCR decision in New Zealand," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 79, pages 1-15, July.
    • Handle: RePEc:nzb:nzbbul:jul2016:11
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    References listed on IDEAS

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    1. Dean Ford & Elizabeth Kendall & Adam Richardson, 2015. "Evaluating monetary policy," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 78, pages 3-21, November.
    2. Adam Richardson & Rebecca Williams, 2015. "Estimating New Zealand’s neutral interest rate," Reserve Bank of New Zealand Analytical Notes series AN2015/05, Reserve Bank of New Zealand.
    3. John Murray, 2013. "Monetary Policy Decision Making at the Bank of Canada," Bank of Canada Review, Bank of Canada, vol. 2013(Autumn), pages 1-9.
    4. Klaus Schmidt-Hebbel & Carl E. Walsh, 2009. "Monetary Policy under Uncertainty and Learning: An Overview," Central Banking, Analysis, and Economic Policies Book Series, in: Klaus Schmidt-Hebbel & Carl E. Walsh & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.),Monetary Policy under Uncertainty and Learning, edition 1, volume 13, chapter 1, pages 001-025, Central Bank of Chile.
    5. Bloor, Chris & Matheson, Troy, 2011. "Real-time conditional forecasts with Bayesian VARs: An application to New Zealand," The North American Journal of Economics and Finance, Elsevier, vol. 22(1), pages 26-42, January.
    6. Dr Don Brash, 2001. "Making monetary policy: a look behind the curtains," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 64, March.
    7. Moutot, Philippe & Jung, Alexander & Mongelli, Francesco Paolo, 2008. "The working of the eurosystem: monetary policy preparations and decision-making - selected issues," Occasional Paper Series 79, European Central Bank.
    8. Kirdan Lees, 2016. "Assessing forecast performance," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 79, pages 1-19., June.
    9. Philippe Moutot & Alexander Jung & Francesco Paolo Mongelli, 2008. "The working of the eurosystem - monetary policy preparations and decision-making – selected issues," Occasional Paper Series 79, European Central Bank.
    10. Michelle Lewis & Dr John McDermott & Adam Richardson, 2016. "Inflation expectations and the conduct of monetary policy in New Zealand," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 79, pages 1-12, March.
    11. Michelle Lewis, 2016. "Inflation expectations curve: a tool for monitoring inflation expectations," Reserve Bank of New Zealand Analytical Notes series AN2016/01, Reserve Bank of New Zealand.
    12. Geordie Reid, 2016. "Evaluating the Reserve Bank’s forecasting performance," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 79, pages 1-14, August.
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    Cited by:

    1. Gael Price & Amber Wadsworth, 2019. "Effective monetary policy committee deliberation in New Zealand," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 82, pages 1-18, April.
    2. John McDermott & Rebecca Williams, 2018. "Inflation Targeting in New Zealand: An Experience in Evolution," RBA Annual Conference Volume (Discontinued), in: John Simon & Maxwell Sutton (ed.),Central Bank Frameworks: Evolution or Revolution?, Reserve Bank of Australia.

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