Adrian Orr: Monetary policy challenges for a small open economy during Covid-19

Text of the Sir Leslie Melville Lecture by Mr Adrian Orr, Governor of the Reserve Bank of New Zealand, Canberra, 2 December 2020.

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

Introduction

Tēnā koutou katoa, welcome everybody. Thank you for the privilege and opportunity to deliver this year's Sir Leslie Melville lecture. Joining today via video conference provides the appropriate backdrop to the theme of my speech – implementing monetary policy during the COVID-19 pandemic.

Today I will outline the focus Te Pūtea Matua, the Reserve Bank of New Zealand, maintained throughout our response to the pandemic crisis. Our legislative mandate and operational independence put us in good stead to act swiftly and with confidence to provide effective assistance in buffering the economic impact of the virus here in New Zealand.

The team at the Reserve Bank remained focused on maintaining low and stable consumer price inflation, contributing to maximum sustainable employment, and promoting a sound and efficient financial system. I also outline how the Reserve Bank's monetary and financial policies provided significant mutual support for the Government's fiscal initiatives. The support was direct through lower interest rates and financial regulatory efforts, and indirect via our market operations.

Not all has been plain sailing of course, and I am immensely proud of our team as to how they responded to rapid change with innovation and commitment.