Reserve Bank/Monetary Policy

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Not set out on their website.

• Better coordination of monetary and fiscal policy, initially through requirements to comment on how this coordination is occurring in the Reserve Bank Act and Fiscal Responsibility Act.
• A review of the conduct of monetary policy in light of the likely increased frequency of resource shortage driven price shocks, including the need for better integration between monetary policy and policies design to assist adjustment to such price shocks. This could include consideration of changes to the Reserve Bank Act to make explicit the fact that the Bank currently considers employment and external balance issues when setting monetary policy.
• Consideration, if the exchange rate is at unrealistically high levels in the medium term, of a more actively managed exchange rate through measures designed to reduce the attractiveness and profitability of currency speculation.
• Reviewing the extent to which New Zealand's exposure to risky international financial instruments (such as derivatives) is consistent with sustainable development, with a view to encouraging the financial sector to take responsible long-term financial decisions and avoid excessive risk to economic stability. (more here)

• We will ensure the interests of exporters are represented on the Reserve Bank Board. How the Reserve Bank implements its policies is determined by the Board and the Governor of the Reserve Bank.
• We think the interventions by the Reserve Bank which started in 2004 can and should be pushed harder. While this does carry some extra risk for the Crown, we believe this will be modest. By increasing the risk for speculators that the Bank will catch them out, volatility will be reduced.
• Labour will also change the Policy Targets Agreement to include a requirement to explicitly consider the effects of monetary policy on exports. In practice we believe that, faced with rapid credit expansion, this change would allow the bank to use prudential ratios rather than rely solely on interest rates. (more here)

Not set out on their website.

Not set out on their website.

Not set on their website.

Not set out on their website.