Reserve Bank of New Zealand (RBNZ) Chief Economist Paul Conway said the central bank has no plans to deploy additional monetary policy (AMP) tools in the near term, emphasising that it is unrealistic to expect either monetary or fiscal policy to offset every economic shock.
Headlines earlier:
Sticking this up now for a bit of clarity on what he was talking about.
Speaking at the Citi Australia & New Zealand Investment Conference in Sydney, Conway said the Official Cash Rate (OCR) remains the RBNZ’s preferred policy lever for managing monetary conditions. He noted that while tools such as large-scale asset purchases were effective during the pandemic, they also risked overstimulating the economy — contributing to inflation pressures that later required sharp rate hikes to contain.
“We do not expect to use additional monetary policy tools again anytime soon,” he said, while adding that the RBNZ continues to refine its understanding of how such instruments affect the economy and how best to coordinate with fiscal authorities in future crises.
Conway stressed that AMP tools could still play a stabilising role during severe downturns when the OCR hits its lower bound, but warned that any future intervention must preserve the bank’s operational independence and focus on medium-term inflation control.
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Also from Conway earlier:
