20 Feb 2009

Select Committee finds monetary policy is sound

9:53 pm on 20 February 2009

A Parliamentary select committee has found that New Zealand's monetary policy is sound.

In 2007 the former Labour government asked the finance and expenditure committee to undertake an inquiry into future monetary policy framework.

It considered the causes of inflationary pressures and examined the role of productivity in the economy.

Finance Minister Bill English says Government initiatives to boost productivity and cut red tape are consistent with the committee's recommendations.

In December, the Government signed a new Policy Targets Agreement with the Reserve Bank.

The unchanged target requires the bank to keep inflation between 1 and 3%.