A renewed Policy Targets Agreement (PTA), which sets out specific targets for maintaining price stability has been signed by Finance Minister Steven Joyce and incoming Acting Reserve Bank Governor Grant Spencer.
“Earlier this year I announced that Deputy Reserve Bank Governor Grant Spencer will be appointed as the Acting Governor of the Bank for six months, following the expiry of current Governor Graeme Wheeler’s term on September 26 this year,” Mr Joyce says.
“Mr Spencer and I have agreed that there will be no change to the existing Policy Targets Agreement for the period that he will be acting Governor.”
Under the existing agreement the Reserve Bank is required to keep future CPI inflation outcomes between 1 per cent and 3 per cent on average over the medium term. The Bank is also required to focus on keeping future average inflation near the 2 per cent target midpoint.
The Policy Targets Agreement takes effect on 27 September 2017, after Reserve Bank Governor Graeme Wheeler completes his term on 26 September 2017, and will apply from 27 September 2017 until 26 March 2018.
“The existing PTA has served New Zealand well and there are benefits in maintaining consistency in the agreement,” Mr Joyce says. “The renewed agreement will maintain continuity and stability in the monetary policy target over the election period and during the period of appointment of a new Governor.”
The renewed Policy Targets Agreement is available here.