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Phase 1 of the Reserve Bank Act Review

Phase 1 is focused on adding employment to the price stability objective of the Bank and providing for a committee decision-making model for monetary policy decisions.

The legislation making the changes to New Zealand’s monetary policy framework that were recommended during Phase 1 was granted Royal assent on 20 December 2018, and the changes to the monetary policy framework are now being implemented. Implementation will be completed by April 1 2019, when the changes to the Act come into force.

Progress of Phase 1 of the Review

Progress of Phase 1 of the Review showing highlighting implementation phase in quarter 1 2019

Issue of the remit and the charter

Following agreement with the Governor of the Reserve Bank, the Minister of Finance issued the first remit for the monetary policy committee on 14 February 2019. This sets the operational objectives for monetary policy, and replaces the Policy Targets Agreement.

Also issued on 14 February 2019, by agreement between the Minister and the Governor, was the first charter for the monetary policy Committee. The charter provides for the transparency, accountability and decision making procedures for the monetary policy committee. Both the charter and remit are available on the reserve Bank’s website.

Advice relating to the remit and charter will be proactively released with other documents relating to the implementation of Phase 1 in March 2019.

Reserve Bank of New Zealand (Monetary Policy) Amendment Bill

On 20 December 2018 the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill received Royal assent.

This amendment to the Reserve Bank of New Zealand Act implements policy decisions from phase 1 of the Review announced on 26 March 2018 (refer below). It also implements a number of detailed decisions necessary to give effect to these previously announced changes.

Policy decisions announced on 26 March 2018

Policy decisions on phase 1 of the Review were announced on 26 March 2018 alongside the signing of the Policy Targets Agreement (PTA) by Hon Grant Robertson and Adrian Orr. Advice on the 2018 PTA can be found at Policy Targets Agreements Information Release.

The key decisions that have been made by Cabinet under phase 1 are:

  • To include supporting maximum sustainable employment alongside price stability as an objective of monetary policy in the Act.
  • To require that monetary policy decisions be made by a Monetary Policy Committee (MPC) of 5-7 members that includes a minority of external members.
  • The MPC will take decisions by consensus where possible, but publish records of meetings that outline differences when they exist and the balance of votes where consensus is not reached
  • Members of the MPC will be appointed by the Minister of Finance following a nomination of the Reserve Bank Board, with the Reserve Bank Governor and Deputy Chief Executive being members by virtue of their positions in the Bank. The Governor will be the chair of the MPC.
  • The Reserve Bank will retain operational independence.

A number of consequential amendments are necessitated by these changes, including some changes to the duties of the Reserve Bank Board, the role of the Governor, and the mechanism to set the policy target for monetary policy.

A graphic summary of the phase 1 decisions can be found at Modernising New Zealand’s Monetary Policy Framework: Phase One Cabinet Decisions

The documents relating to policy decisions on phase 1 of the Review include:

Proactive release of information

The Treasury has made public a number of documents relating to phase 1 of the Review including background papers that were provided to the Independent Expert Advisory Panel (IEAP) to inform their discussion; agendas, minutes and papers from meetings 1 and 2 of the IEAP; officials’ advice; cabinet papers; and public submissions. 


For general enquiries about Phase 1 of the Reserve Bank of New Zealand Act Review, please email  The Treasury will respond to enquiries made through this channel as part of its role as the secretariat for the Review.

All media enquiries should be directed to

Last updated: 
Thursday, 14 February 2019