Surely, the Reserve Bank and its obsession with price stability have been a major contributor to the large current account deficit which New Zealand has experienced over the last decade? Well, actually no. New Zealand has had a current account deficit in every year since 1974, through a range of monetary policy regimes.
Indeed, the largest deficit experienced over that 25 year period, relative to GDP, was in the mid-seventies, with another very large deficit in the mid-eighties. I am myself absolutely persuaded that, even if the Reserve Bank Act were amended to make the Bank responsible for reducing the balance of payments deficit, monetary policy has no ability to produce any sustainable reduction in that deficit.