Members of the public are due to get greater insight into the thinking of those on the powerful Reserve Bank committee that sets interest rates.
The Monetary Policy Committee (MPC) and Finance Minister Nicola Willis have agreed to a new charter that will see members’ individual views on how to set monetary policy publicised.
So, members’ views on how the Official Cash Rate (OCR) should be set will be disclosed in meeting minutes, as will their rationales – even if they all share the same view.
Currently, the committee discloses if its members vote differently on how to set the OCR. But it doesn’t say who voted for what.
For monetary policy watchers, this will be a useful move. When there is a divergence of views, it will be very useful to see who voted what way, and why.
The NZIER Shadow Board always published the views of individual members, and their rationale. It will be good to have the real decision maker do the same.
David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition
1 comment:
It is ridiculous that we are ideologically and practically opposed to price controls and yet when it comes to the price of money, price fixing is all fine and dandy.
There is no need for the reserve bank. Sure we need a bank regulator but that can be separate from the money management function.
Let treasury create the money as needed and let the market decide on interest rates. That would but a stop to wasteful government spending very fast and put an end to all this structural malinvestment.
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