July 25, 2022 23:04 GMT
New Zealand Opposition Leader Christopher Luxton has called for a public inquiry into the RBNZ's policy response to the COVID-19 crisis as another former Governor accused the Reserve Bank's leadership of policy errors.
- The main opposition National Party says the RBNZ unleashed a "tidal wave of cash" into the economy, which should be studied to "better understand the lasting impact of key decisions, the length of stimulus and any lessons that can be learned for the future."
- The Nationals would like to examine the roles of the Finance Minister and the Treasury in facilitating the RBNZ's decisions and coordinating with the Reserve Bank. They point to the need to conclude the inquiry before the appointment of RBNZ Governor, with Adrian Orr's term due to expire in March 2023.
- Note that the National Party have long been critical of the RBNZ's pandemic response and have accused the Reserve Bank of fuelling inflation. A few months back, Luxon pledged that if the Nationals won the 2023 election, they would remove the RBNZ's dual mandate and make price stability the Bank's sole target.
- The RBNZ's aggressive policy easing amidst the COVID-19 pandemic has also come under criticism from a suite of the Bank's former officials. This morning, Orr's immediate predecessor Graeme Wheeler became the latest one to speak out against the RBNZ's policy course, joining former Governors Brash and Spencer, ex-Chair Grimes and ex-Chief Economist McDermott.