It recognised the limitations of monetary policy over the medium term, and provided the Bank, financial markets and wider public with a clear objective for policy. Moreover, the initial PTA clearly defined price stability with a numerical target band of 0 to 2 percent.
This clear numerical target provided a nominal anchor against which the Governor’s performance could be assessed and around which inflation expectations could converge. (iv) Single decision maker (RBNZ Act Section 9) The final stake in the ground was the assignment of authority and responsibility to an individual – the Governor.