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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. 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.
    3. 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.
    4. Kirdan Lees, 2016. "Assessing forecast performance," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 79, pages 1-19., June.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
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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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