WELLINGTON, Sept 10 (Reuters) - New Zealand’s Treasury said on Monday it will start consultations in November on the second phase of a review of the laws governing the country’s central bank, followed by two more rounds of discussions in 2019.
The second phase of the two-part review is considering the Reserve Bank of New Zealand’s (RBNZ) governance and decision-making, as well as the bank’s role as a regulator of financial institutions and its macroprudential policy.
The government earlier this year introduced a bill to Parliament to formally add employment to the bank’s monetary policy mandate, alongside inflation targeting, following the first phase of the review.
Treasury said the consultation period on the second phase will run until late January and will be followed by two more rounds of consultation during 2019, suggesting any further legislative changes will be some time away.
“Feedback and recommendations from the first consultation will help inform the Government’s preliminary views around any changes to the functions and role of the Reserve Bank,” Treasury Review Team Director Bernard Hodgetts said in an emailed statement.
New Zealand’s Labour-led government launched the review in late 2017 in line with an election promise to include maximising employment as a monetary policy goal.
The central bank, the world’s first to adopt an official inflation target in 1989, has already put a greater focus on employment on a temporary basis, but the proposed law - likely to be passed early next year - would mark a permanent shift.
The law change would also result in monetary policy decisions being made by a committee, taking away the governor’s current sole decision-making power. (Reporting by Charlotte Greenfield; editing by Richard Pullin)