Reserve Bank of New Zealand (RBNZ)

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    Reserve Bank of New ZealandThe Reserve Bank of New Zealand (RBNZ) is the central bank of New Zealand and is responsible for maintaining the stability of the country’s financial system.

    The bank was created in 1934 in response to the passing of the Reserve Bank Act of 1933.

    Unlike other central banks, such as the United State’s Federal Reserve System, the RBNZ is completely owned by the New Zealand government, and therefore ultimately by the public. Although it is not directly a government department, the finances are included in the crown accounts.

    Functions and influence on the NZD

    Like most central banks, the RBNZ is primarily a policy-making body. Its main duties include ensuring that monetary policy promotes price stability, promoting a sound financial system and meeting the currency needs of the public.

    The RBNZ is also responsible for regulating the corporate policy of commercial banks and safeguarding against foul play. In late 2007, the government took the decision to extend the Bank’s regulatory duties to include finance and insurance companies, building societies and credit unions.

    The RBNZ’s duty towards the New Zealand dollar (NZD) is much the same as the other central banks in that it has sole power to issue legal tender. The bank is also required to respond to news events and releases that may affect the NZD currency pairs, considering the strength or weakness of the NZD and the potential impact on the New Zealand economy.

    Structure

    The RBNZ is governed by Graeme Wheeler, but is supported by a Board of Directors. The board holds regular meetings in which the performance of the governor and bank itself is reviewed. The board also provides advice to the governor on how to best carry out the RBNZ’s duties.

    Reserve Bank of New Zealand website

    Reserve Bank of New Zealand wikipedia