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Reserve Bank Act to be reviewed

NZ Newswire logoNZ Newswire 6/11/2017

Finance Minister Grant Robertson has announced the terms of reference for a review of the Reserve Bank Act.

The legislation is the framework under which the bank sets monetary policy, and the review is part of the coalition agreement with NZ First.

"The current Reserve Bank Act is now nearly 30 years old," Mr Robertson said.

"While it has served New Zealand well in general, now is the right time to undertake a review to ensure our monetary policy framework still provides the most efficient and effective model for New Zealand."

The bank sets interest rates based mainly on the need to control inflation, and NZ First leader Winston Peters has for years argued it should consider other factors such as the state of the economy, exports and jobs.

Mr Robertson said the government was firmly focused on creating more jobs and higher wages.

"Every part of the economic apparatus needs to play its part in this, including monetary policy."

An independent expert advisory panel will be set up to undertake the review.

A timeline for the review is still to be decided.

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