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NZ CurrencyReserve Bank of New Zealand - our central bank

The Reserve Bank of New Zealand publishes statistics for economic indicators, including the Consumer Price Index (inflation); exchange and interest rates; external finance; Government finance; and monetary and financial statistics.

The three main functions of the bank are: operating monetary policy to maintain price stability; promoting the maintenance of a sound and efficient financial system; and meeting the currency needs of the public.

Monetary policy

Monetary policy is the term economists use to describe ways of managing the amount of money in an economy. It is also a tool to manage inflation and to prevent large variations in economic growth and employment.

The Reserve Bank has a wide range of information on its website:

Monetary Policy Statement

The Reserve Bank publishes its Monetary Policy Statement (MPS) quarterly. Each statement describes:

  • How the Bank proposes to achieve its targets.
  • How the Bank proposes to formulate and implement monetary policy during the next five years.
  • How monetary policy has been implemented since the last MPS.

From September 13, 2007 the Reserve Bank will webcast its Monetary Policy Statements.

The Official Cash Rate

The Official Cash Rate (OCR) influences the cost of borrowing and is used as a way to control consumer spending. The cash rate indirectly determines how much consumers can afford to borrow from retail lenders such as banks as those lenders pass on costs to borrowers. Floating mortgages, where interest rates change with the official cash rate, are a common example.

Higher official cash rates discourage spending as the cost of mortgages, credit cards and personal loans increase, and encourage saving as interest earned on savings will increase. Lower rates are used to stimulate the economy in times of recession.

Record low rate in 2009

The January 2009 cut of 150 basis points reduced the OCR to 3.5 percent, its lowest rate since March 1999 when the mechanism was introduced. In March 2009 the rate was cut a further 50 basis points to 3 per cent.

Read the official press release about the March OCR reduction, or browse all press releases.

More information

Currency - coins and notes

The Reserve Bank is responsible for minting coins and printing notes - the money that we use every day.

Notes and coins are legally defined as ‘legal tender’, a technical term which means that if you owe money, you can clear up that debt instantly with legal tender.

Other information

  • Resources for schools - includes games and resources to check understanding of fiscal monetary policy from the Reserve Bank
  • Treasury - The Treasury is the Government’s lead adviser on economic policy and develops strategic advice for Ministers and Cabinet on the performance, future shape and direction of New Zealand’s economy.
  • Statistics New Zealand - Publishes statistics on the economy - see Economic Indicators. Also publishes regular Hot Off The Press releases of its very latest economic statistics.

Banking resources

Our online resources

Internet Gateway

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