29 November 2000

Monetary Policy Statement: format changes

The Reserve Bank today indicated that tables in the upcoming December Monetary Policy Statement would include some minor format changes.

Tables 1, A and C will remain, while tables B, and D to H will no longer be published. In addition:

• Quarterly GDP projections will no longer appear.
• All projected numbers will be rounded to the nearest half per cent and will be expressed as fractions rather than as decimals. This will not apply to the first two quarters' CPI inflation projections.
• The Monetary Conditions Index will no longer appear.

A mock-up of the newly formatted tables using numbers from the August Monetary Policy Statement can be viewed by clicking here.

Reserve Bank Assistant Governor David Archer said: "The intention of these changes is to better indicate the substantive and medium term elements of the Reserve Bank's monetary policy decision making. The Reserve Bank has come to the judgement that the level of detail previously published added little, and may sometimes have created misleading impressions. The previous format provided so much detail that a false impression may have been created that monetary policy depended heavily on highly detailed and mechanistic economic forecasts.

"In fact, what really matters is the quality of the Reserve Bank's judgements, based on its understanding of the broad forces shaping the economy and the inflation outlook. The new format is designed to be consistent with that.

"An additional change will be that, unlike previously, when the Reserve Bank makes an interim Official Cash Rate announcement and the OCR is not changed, a brief commentary explaining the no-change decision will be provided. A no-change decision can be as important as a decision to adjust the OCR, and markets need to understand the reasons for both," Mr Archer concluded.

For further information contact
Paul Jackman
Corporate Affairs Manager
Ph 04 471 3671, 021 497 418, home 04 938 8177, Jackmanp@rbnz.govt.nz