(2 February 2012 – New Zealand) Reserve Bank of New Zealand (RBNZ) governor Alan Bollard announced after 10 years at the helm of the central bank that he would leave in September.Finance minister Bill English said no significant changes to the Government’s monetary policy would occur, and Prime Minister John Key said there had been no discussions about changing how the Official Cash Rate is set – and predicted only minor alterations.
English repeated that message on Wednesday – ruling out a new policy target agreement with Bollard’s successor. And he dismissed chatter about establishing a monetary policy committee to set interest rates.
The focus should be on growing investment and productivity, not inflation, English said.
”There seems to be some debate about it – as if we have a big inflation problem … in fact inflation is dropping away…”
“That was a big issue three or four years ago. The issue now isn’t monetary policy … the issue now is building confidence and building investment.”
Establishing a committee has already been examined, he said.
”That’s been looked at a couple of times … we haven’t seen reason to change … if only because we don’t have a whole lot of monetary policy experts around the country.
”But these are all pretty peripheral arguments which were had on and off over the last 10 years. The world has changed. Inflation is not the big bug bear. What we need is more investment, more savings. Monetary policy’s not a big focus.”