The Reserve Bank of New Zealand is New Zealand's central bank. It was established in 1934 and has been wholly owned by the government of New Zealand since 1936. Its three main functions are:
Click below or on the diagram for further information about how these functions are carried out, and about the structure and services of the Reserve Bank.
The Reserve Bank operates a small museum, as a public education resource, which includes a significant range of exhibits, including the only operating example in the Southern Hemisphere of a water-based MONIAC economic computer.
Learn more: Reserve Bank Museum
Teams within the Bank provide support services, including Communications, Financial Services, Human Resources, Knowledge Services, and Risk & Audit Assurance.
The Reserve Bank oversees and operates New Zealand's wholesale payment and settlement systems – the Exchange Settlement Account System (ESAS) and the NZClear New Zealand system, which the registered banks use to complete transactions with each other.
Learn more: Payments & settlements
Learn more about payments system oversight: Payment system oversight
The Reserve Bank formulates and implements monetary policy to achieve price stability. This is defined and specified by a Policy Targets Agreement, which currently requires the Bank to keep CPI inflation between 1-3 percent, on average, over the medium term, with a focus on the mid-point of 2 percent.
Learn more: Monetary Policy
The Governor of the Reserve Bank is accountable to the government for the Bank's performance, but in most areas has statutory independence as to how outcomes are achieved. A Board of Directors is appointed by the government, but is not a decision-making body. The Bank employs approximately 260 staff and operates from The Terrace in Wellington, and a small office in Auckland.
Learn more: About us
The Reserve Bank holds and manages New Zealand's foreign exchange reserves. The Bank also operates in New Zealand's domestic markets to implement its monetary policy objective and provide liquidity to the banking system.
Learn more: Financial market operations
Learn more: Domestic markets
In order to help maintain a sound and efficient financial system, the Reserve Bank registers and monitors banks and requires them to meet certain criteria. The Reserve Bank also regulates non-bank deposit-takers and insurance companies.
Learn more: Financial stability
Learn more about non-bank deposit taking oversight:Non-bank deposit taker oversight
Learn more about insurance sector oversight: Insurance
The Reserve Bank is the only organisation authorised to issue currency for New Zealand. Banks buy currency in wholesale amounts from the Reserve Bank at face value and return it to the Reserve Bank for replacement. Notes are inspected by the Reserve Bank for quality and to detect any forgeries.
Learn more: Notes & coins
