This multitude of considerations influences the Bank’s judgement about how monetary policy should be adjusted to help move inflation towards its medium-term target.6 The publication of a 90-day interest rate projection, together with an inflation projection, conveys the Bank’s view of what it considers appropriate when making these considerations, and how this changes when new information becomes available.
The Bank uses a range of modelling techniques and expert judgement to prepare a forecast for the 90-day interest rate. Our structural model, NZSIM7, is used to summarise all the new information provided by recent data, financial market developments, indicator models and our discussions with New Zealand businesses.