Reserve Bank of New Zealand Governor on Rate Hike, Growth

The transcript discusses the Reserve Bank's decision to gradually reduce bond holdings and monetary stimulus to maintain price stability and support employment. It highlights global economic challenges, including rising inflation and slowed growth due to COVID-19. New Zealand's economy remains strong, supported by fiscal measures and high vaccination rates, despite short-term disruptions. Inflation pressures are driven by high import costs and capacity constraints. The committee anticipates further monetary stimulus removal, considering growth and inflation risks.

What is the committee's approach to reducing the Reserve Bank's bond holdings?

• Through immediate liquidation

• Via bond maturities and managed sales

• By increasing bond purchases

• By halting all bond activities

What factors are contributing to the slowdown in global economic growth?

• Increased consumer spending

• Persistent impacts of COVID-19 and tightening monetary conditions

• Decreased government spending

• Rising employment rates

How is New Zealand's economic strength being supported?

• By reducing exports

• Through strong balance sheets and fiscal support

• By increasing interest rates

• Through decreased household savings

What is the current state of employment in New Zealand according to the committee?

• Unchanged from previous levels

• Above maximum sustainable levels

• At maximum sustainable levels

• Below sustainable levels

What is the committee's expectation for inflation in the coming years?

• It will decrease below target

• It will fluctuate unpredictably

• It will remain above target

• It will return to the 2% midpoint