Monetary policy has been accommodative, which has been appropriate in light of the weak real economy. We are however in a hiking cycle and the deteriorating inflation outlook may necessitate policy action as the window for an unchanged stance has narrowed. The pace of normalisation will however be influenced by the data.
To retain our legitimacy as New Zealand’s central bank we have to evolve along with the economy, the financial system and society. This means working closely with stakeholders. It means an ongoing conversation with New Zealanders, speaking in terms that we all recognise, quite literally in some cases.