The present Policy Targets Agreement What does the present Policy Targets Agreement imply about the way in which the Reserve Bank will formulate monetary policy in the years ahead? Without going into great detail, it means that we will be aiming to keep CPIX inflation close to the midpoint of the 0 to 3 per cent target one to two years ahead.
We aim close to the midpoint because we recognise that, in an uncertain and fast-changing world, aiming at the midpoint maximises the chance that we will be able to keep inflation in the target range. Aiming near either edge of the target would run too high a risk that unexpected shocks would throw us outside the target.