Key pours cold water on monetary policy changes
PM says government might want to “tweak things at the margins,” but the current approach had served New Zealand well. | PLUS Says inflation target band of 1-3% should remain unchanged.
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Prime Minister John Key sees little need for any change to how the Reserve Bank manages monetary policy.
As the National Business Review revealed 10 days ago, the Treasury has floated several possible changes when the policy targets agreement is re-negotiated with the new Reserve Bank governor later this year.
One is moving to a committee model, as followed by other central banks: another is to more formally include reference to the impact of the new prudential rules and the effect these are having on retail interest rates.
However Mr Key said yesterday he sees little need for change.
The government might want to “tweak things at the margins,” he said, but the current approach had served New Zealand well, he told his post-Cabinet press conference.
“I think for the most part we have world’s best practice and it’s served us pretty well. It’s not perfect, but it’s the best system that we can see and it’s actually consistent with what most other countries do," Mr Key said.
He cited specifically the inflation target band of 1-3% as something which should remain unchanged.
“I think we are at the right place at the moment…the 1-3% band is about right.”
Rob Hosking
Wed, 01 Feb 2012
Wed, 01 Feb 2012
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Key pours cold water on monetary policy changes
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