Academic journal article The Reserve Bank of New Zealand Bulletin

RBNZ Welcomes Svensson Report

Academic journal article The Reserve Bank of New Zealand Bulletin

RBNZ Welcomes Svensson Report

Article excerpt

28 February 2001

The Reserve Bank today said it welcomed the judgement of Professor Lars Svensson that "Monetary policy in New Zealand is currently consistent with the best international practice of flexible inflation targeting."

This follows the release today of the Government's Independent Review of the Operation of Monetary Policy in New Zealand prepared by Professor Svensson.

Reserve Bank Governor Don Brash commented "Professor Svensson's review is thorough and extensive. I'm very pleased that Professor Svensson's research indicates that the Reserve Bank is following best practice in the way it delivers price stability, that being the Bank's primary function, as set by statute.

"The Reserve Bank is required, under the Policy Targets Agreement, to deliver price stability in such a manner as 'to avoid unnecessary instability in output, interest rates and the exchange rate', and Professor Svensson's research indicates that the Bank is achieving this too.

"I also acknowledge that Professor Svensson's report is critical of some of the Reserve Bank's decisions and implementation procedures in the past, and in particular our use of a Monetary Conditions Index between mid-1997 and March 1999. …

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