Adrian Orr: Monetary policy - a compass point in uncertain times

Panel remarks by Mr Adrian Orr, Governor of the Reserve Bank of New Zealand, at the Federal Reserve Bank of San Francisco, San Francisco, 14 November 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Tēnā koutou katoa,

Thank you for inviting me to this panel discussion. It is a pleasure to speak on a topic that is so relevant to a small open economy like New Zealand-the effects of uncertainty and dampened global growth on monetary policy.

Heightened global uncertainty and slower international trade have contributed to a weakening in global growth since mid-2018. Much of the uncertainty is related to global developments, such as Brexit and the trade tensions between US and China. In New Zealand, although some measures of uncertainty are relatively subdued, this may simply reflect a consensus that low growth is likely to stay in the near future.

In light of this, it is vital that monetary policy acts as a compass point for decision making. We can do this by:

• Remaining focused on our core objectives;
• Adopting a risk-management approach for making monetary policy decisions; and
• Working in concert with all available policy levers-not as a lone force.