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Reserve Bank of New Zealand Act 2021

Central bank functions - Monetary policy - Remit for MPC

123: Contents of MPC remit

You could also call this:

"What the Monetary Policy Committee is supposed to achieve"

Illustration for Reserve Bank of New Zealand Act 2021

The MPC remit must say what the goals are for making monetary policy. You can think of monetary policy like the rules for how money works in New Zealand. The Minister can decide how to set these goals. The Minister can set targets for the economic objective, which is a goal for the economy. They can also decide how to weigh different economic objectives if there is more than one. The Minister can define what the economic objective means and what the MPC should think about when trying to achieve it. Any goals the Minister sets must align with the economic objective.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS289748.

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122: Remit for MPC, or

"The Minister must have a set of instructions for the MPC at all times."

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124: Other matters relating to MPC remit, or

"More details about the MPC remit are in Part 1 of Schedule 3"

Part 3Central bank functions
Monetary policy: Remit for MPC

123Contents of MPC remit

  1. The MPC remit must set out operational objectives for carrying out the function of formulating monetary policy.

  2. The MPC remit may specify or provide for the operational objectives in any way that the Minister thinks fit, including by specifying or providing for 1 or more of the following matters:

  3. a target or targets for the economic objective:
    1. a framework for weighting the economic objectives (if an Order in Council in force under section 125 provides for more than 1 economic objective):
      1. defining any matters in connection with the economic objective:
        1. a requirement for the MPC to have regard to 1 or more matters in connection with seeking to achieve the economic objective.

          1. A matter under subsection (2) must not be inconsistent with the economic objective.

          Compare
          Notes
          • Section 123(2)(a): amended, on , by section 10(1) of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).
          • Section 123(2)(b): amended, on , by section 10(2) of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).
          • Section 123(2)(c): amended, on , by section 10(1) of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).
          • Section 123(2)(d): amended, on , by section 10(1) of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).
          • Section 123(3): amended, on , by section 10(1) of the Reserve Bank of New Zealand (Economic Objective) Amendment Act 2023 (2023 No 64).