Monetary policy implementation
The Monetary Policy Committee sets the stance of monetary policy by adjusting the level of the Official Cash Rate (OCR). This determines whether monetary policy is a “headwind” or “tailwind” for economic activity and inflation. But for the OCR to affect the economy, it must first transmit through New Zealand’s financial system.
We ensure effective monetary policy implementation through a framework of facilities and operations that anchor short-term interest rates at or near the OCR. We have 2 monetary policy implementation objectives:
- Ensuring that short-term market interest rates trade at or near the OCR
- Managing settlement cash in the banking system to facilitate payments and settlement flows.
This Bulletin also discusses:
- the evolution of our monetary policy implementation framework
- features of different monetary policy implementation frameworks
- steps we have taken in recent years to improve the implementation of monetary policy
- the outlook for liquidity operations.
Read the Bulletin
(PDF, 1.2 MB)
Related information
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