Reserve Bank of New Zealand Act 2021

Financial and accountability matters - Funding agreements and annual dividend - Funding agreements

209: Funding agreements

You could also call this:

"The Reserve Bank's funding agreement explains how much money it can spend each year."

Illustration for Reserve Bank of New Zealand Act 2021

The Minister and the Reserve Bank of New Zealand can make a funding agreement. This agreement says how much money the Bank can use each year to do its job. You can find out when the agreement starts in section 210. The Minister and the Bank must make sure they have an agreement for every year. The agreement lasts for 5 years. They can change or end the agreement if they both agree. The agreement talks about the Bank's expenditure. Expenditure means the money the Bank spends. It includes most of the money the Bank spends, but not things like interest or foreign exchange losses. The Minister and the Bank can decide what expenditure is excluded. They can also exclude payments made to the Crown under section 140. You can read more about this in the funding agreement.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS287206.

This page was last updated on 1 January 2026 — View changes

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208: Power of Minister to direct Bank relating to minimum level of capital and financial risk management, or

"The Minister can direct the Reserve Bank on money and risk management."

210: Contents of funding agreements, or

"What the Reserve Bank's funding agreement must include"

Part 5Financial and accountability matters
Funding agreements and annual dividend: Funding agreements

209Funding agreements

The Minister and the Bank may enter into a funding agreement that specifies the amounts that may be paid or applied in meeting the expenditure incurred by the Bank in each financial year in performing or exercising its functions or powers under this Act or any other legislation.
The Minister and the Bank must take all reasonable steps to ensure that there is a funding agreement applying for every financial year and each funding agreement must apply to a period that comprises 5 consecutive financial years.
A funding agreement comes into effect when signed under section 210.
The Minister and the Bank may by agreement—
vary the provisions of a funding agreement; or
terminate a funding agreement and enter into a new funding agreement.

In this section and section 210, expenditure, in relation to a financial year,—
includes all expenditure (whether operating or capital) that is incurred by the Bank and that will be reported in its financial statements for that year; but
does not include—
1. interest expenditure incurred by the Bank (for example, interest paid by the Bank in relation to settlement accounts and borrowings); or
2. foreign exchange losses; or
3. losses (or provision for losses) on financial instruments or revaluation of financial instruments; or
4. any payments made to the Crown under section 140; or
5. the cost of inventories; or
6. the cost of purchasing or acquiring financial assets; or
7. the cost of purchasing or acquiring any ownership interest in an entity; or
8. any expenditure agreed by the Minister and the Bank to be exempt expenditure.

Compare

1989 No 157 s 159