MNI BRIEF: RBNZ Wary Of Moving Goal Posts On Inflation Target

Reserve Bank of New Zealand adviser Katy Simpson said changes to the level or band of its inflation target during the current environment of elevated price pressures could be viewed as "moving the goal posts', she said on a remit review webcast Monday, as she suggested the current band target a good balance.

The second stage of the review into the RBNZ's policy remit had highlighted ongoing support for the use of the Consumer Price Index as alternative measures come with "significant downsides" that outweigh the benefits. She said the review showed there was "a lot of benefit" seen in moving to a monthly CPI compared to the current quarterly CPI.

Simpson said there was "merit" in considering whether to place a greater priority on the bank's price stability goal over its maximum sustainable employment objective, though keeping the time horizon for returning inflation back to target unspecified was best to support wellbeing, with flexibility in options a positive for policymakers.