Ref #7482042 v2.2  9  economy and other variables was influential in determining which path was ultimately selected (RBNZ, 2000c). The changes were also a reflection of economic developments. The Bank initially underestimated the combined effect of the Asian financial crisis and the droughts that affected rural New Zealand in the summers of 1997/98 and 1998/99, which led to recession in New Zealand.
We operate in an uncertain world, and monetary policy would never have been able to completely offset the effect of these shocks.