The Reserve Bank Act and the Policy Targets Agreement (PTA) state that monetary policy shall have regard to the efficiency and soundness of the financial system. However, in the current situation, with underlying inflation below target, falling export prices and weakening growth, it would not be appropriate to raise interest rates to dampen the Auckland housing market.
As we say in our foreword, “Our pamphlet series is targeted to a broad audience – students at secondary and tertiary institutions and members of the public that have an interest in increasing their knowledge of economics and business.” We would like to get your views as to whether we are getting close to our target audience.