November 30, 2014 / 8:06 PM / 4 years ago

NZ central bank says inflation targeting still appropriate

WELLINGTON, Dec 1 (Reuters) - The head of New Zealand’s central bank said on Monday that inflation targeting remains the appropriate focus for monetary policy.

Graeme Wheeler said the policy, of which New Zealand was a pioneer, had delivered price stability without reducing long-term growth, and the Reserve Bank of New Zealand (RBNZ) was a flexible inflation targeter.

“We seek to anchor inflation expectations close to the price stability objective while retaining discretion to respond to inflation and output shocks in a flexible manner,” Wheeler said in a speech on inflation targeting to a banking conference.

The RBNZ adopted inflation targeting in 1990. It is required to keep consumer inflation, currently at 1 percent, between 1 and 3 percent on average over the medium-term.

The full speech is available at: here

Writing by Gyles Beckford; Editing by Kevin Liffey

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