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The Reserve Bank’s commitment to monetary and financial stability in a complex and shifting global environment is underlined in the Bank’s Statement of Intent (SOI) for 2012-2015.
“New Zealand’s economic prospects will be heavily affected by developments in global funding markets; the demand for our exports; and the pace of rebuild in Christchurch,” Reserve Bank Governor Alan Bollard said.
“Price stability will remain the Bank’s primary goal in navigating through this new environment. However, we are aware that familiar economic structural landmarks may have moved”.
These landmarks include the country’s growth potential, ‘neutral’ real interest rates, the sustainable exchange rate level, long-run unemployment levels, and private sector debt ratios.
“One of the Bank’s business priorities is to explore this changing territory and ensure that monetary and macro-prudential policies are calibrated accordingly”.
The Bank is also looking to further enhance the resilience of banks, implementing new Basel III capital requirements; and policy options to resolve any bank failures, however unlikely these are.
As a central bank, the Bank also manages a wide range of risks in its own operations, and will put in place a new risk management and assurance operating model.
The SOI shows the Bank’s budget for 2012–13 with a net operating expenditure of $50 million. This budget allows for continuation of the banknote upgrade scheduled for introduction from 2014.
A new Governor is due to be appointed for a five-year term from 26 September 2012.