Reserve Bank of New Zealand press conference — 18 February 2026

What this says

Today the committee reached consensus to hold the OCR at 2.25%.

If the economy evolves as expected, monetary policy is likely to remain accommodative for some time.

We predict it to be 2.8% in the current quarter and fall back to the 2% midpoint over the next 12 months.

the labor market is stabilizing, but unemployment remains high. We expect unemployment to fall as the recovery strengthens.

The committee assesses that these risks are balanced at the current point.

Today the monetary policy committee decided to leave the OCR uh on hold at 2.25%.

The economic fundamentals are consistent with inflation falling to target midpoint over the next two 12 months

one member was discussing the possibility even with the same economic outlook it might be appropriate to tighten a little bit earlier.

But we're not planning on hiking the OCR until we see more inflationary pressures and a stronger economy.

we do see the labor market strengthening this year.

this is why we're a bit cautious uh to the downside uh in terms of the strength of the recovery

So the OCR has been cut from 5.5 to 2.25%.

we saw that underlying inflation what we call core inflation was stable and actually falling.

the committee is fully focused on ensuring that inflation returns to the 2% target over the medium term.

The committee was very confident about its own position at that point in time just as we are confident of our position at this point in time.

And I'd note that the market track is still above our own position.

We published a paper at the end of last year on where we're getting to. uh on that research agenda and the papers that we've published. I I sort of ran it, you know, spent time at the productivity commission. So, it was findings and recommendations, you know, what would it have been good to know uh as a committee over that period such as, you know, things like the effect of a supply shock, you know, what's the optimal role of monetary policy uh in in that case and we've done a lot of work uh on that since and it's really paid off.

The funding for lending program um which had some uh was structured in a way that uh meant we kept commitments to that. We were required to keep commitments to that uh for a period longer than we would ideally have done. Uh and so we recognize that and you would structure if you were ever to use that tool again, you would structure it slightly differently which would allow you to cease using that uh as market conditions corrected.

I suggest people read the 2022 review and the mini run that we did last year to decide whether or not those uh that's a window dressing exercise or a legitimate uh effort uh from a central bank uh to be a learning institution.

Transcript

Good afternoon everyone. Welcome to the RBNZ's February monetary policy statement. I'm Anna Breman, Reserve Bank Governor and chair of the monetary policy committee. I'm joined today by my fellow committee members Karen Silk and Paul Conway here on stage. And we have Haley Gori and Pasana Guy uh at the front row. and we have Carl Hansen online. Before we get underway, I would like to thank my MPC colleagues for your constructive engagements over the past two weeks and the Reserve Bank staff for excellent highquality insights and analysis throughout this process. Over the next 10 minutes, I'll share some slides and I'll talk you through today's decision uh and our assessment on the inflation outlook. Then I look forward to answering your questions on the monetary policy statement. Yeah. So today the committee reached consensus to hold the OCR at 2.25%. The forward OCR path reflects a somewhat stronger economic outlook and balanced risks to inflation. If the economy evolves as expected, monetary policy is likely to remain accommodative for some time. The committee will continue to assess incoming data carefully as the recovery strengthens and inflation falls sub sustainably towards the target midpoint. monetary policy settings will gradually normalize and you can see our new OCR track uh on the slide compared to the November one. So let me turn to the basis for our decision starting with inflation. CPI inflation increased to 3.1% in the December quarter of last year. That's the latest data that we have. It's slightly above the MPC target band. We think inflation now in the first quarter of this year is likely moving back within the target band. We predict it to be 2.8% in the current quarter and fall back to the 2% midpoint over the next 12 months. If we look into the details uh on the inflation outcomes and the forecast uh we can start by looking at nontradables inflation. It has been gradually falling since the peak in 2223 but it was a bit higher than expected uh in the end of last year. This was in part because of high inflation in administered prices and these are prices

that are set or influenced by central and local government such as council rates, vehicle licensing and university fees. When we look forward, we expect non-tradables inflation to fall and administrative price increases to slow. If we turn to tradables inflation, and that's more influenced by global factors, uh we saw that increases in tradables inflation last year was driven by higher inflation for items with volatile prices such as airfares, foreign accommodation, and fuel. And that was particularly true for the end of last year. We expect tradeables inflation to fall over the next 12 months due to relatively stable import prices, but also some support from the recent appreciation in the New Zealand dollars. And you can note here on this slide how volatile tradables inflation tend to be over time. So in addition to these different ways of looking at inflation, we also look at core inflation. Core inflation measures the persistent component of inflation. And as you can see, it tends to be considerably less volatile than headline inflation. That's on this slide. Core inflation is stable and firmly within our target band. And this is consistent with our forecast for inflation to fall over 2026.

So now let's turn to the economic outlook and GDP. Let me start by acknowledging that the past few years have been very tough on many New Zealanders, both household and businesses. Growth has been weak, almost flat over the past few years and inflation has been high. The recovery is still at an early stage and there are differences in growth across regions and across different sectors. In the agricultural sector, in regional New Zealand, growth has been strong and it remains strong given ongoing strength in commodity prices. We expect growth to continue in those sectors, but also broaden across the economy. So we're seeing now that residential and business investments are increasing. Households however remain cautious in their spending and house p house price growth remains weak. But we do project that household consumption uh will increase as past reduction in the OCR continue to support demand and conditions in the labor market will be improving. So, let's turn to the labor market. So, even though the economy is recovering, um, sorry, I'm being a bit fast. What we're seeing in the labor market is that the labor market is stabilizing, but unemployment remains high. We expect unemployment to fall as the recovery strengthens. Employment is actually already growing, but more people are entering the labor force. And this is a good sign because that's usually what you see at the beginning of a recovery. Wage growth is modest and that's consistent again with inflation uh at the midpoint of our target band uh within the next 12 months. So even though the rec economy is recovering, there is still significant spare capacity in the economy and the high unemployment rate is an example of that. So this will continue to put downward pressure on inflation over the coming quarters. So what we're saying is that because we have spare capacity, we expect to see some growth in the economy without inflationary pressures in the near term.

So to summarize, the committee is confident inflation will fall to the 2% midpoint over the next 12 months due to this high spare capacity, due to core inflation firmly within our target band and modest wage growth. In other words, New Zealand's economic fundamentals remain consistent with inflation falling to and remaining at the 2% target over the medium term. Of course, there's always risks to the outlook. The committee assesses that these risks are balanced at the current point. We do see both upside risk to inflation and downside risk. So, if looking at the upside risk that inflation will be higher than we expect, we see that with demand increasing in the economy, businesses could try to increase prices faster than expected. That's what we mean by price setting behavior. On this slide, we see also saying that potential output could remain weak and that means that increasing economic activity could be more inflationary than we expect. We also see a risk relatively small that administered price inflation may not decline as much as we expect. But the the risks are balanced. So there's also risk to the downside. So inflation could be lower than we expect. One reason could be that household spending could be slow to pick up slowing the pace of the economic recovery and then putting downward pressure on inflation. Another thing is that tradables inflation tend to be highly volatile and it could fall faster than we expect. Finally, um maybe a bit optimistically, productivity could improve, enabling economy the enabling the economy to continue to grow with less inflationary pressures. In addition, the global economic outlook remains highly uncertain. So last year, global growth was resilient despite a lot of global risks. We do expect a small moderation in global growth this year in our main trading partners, but there are still a lot of risks out there and some of them we've listed here on this slide. Risk include global trade policy, the impact of AI investment and geopolitical tensions. There's also a risk uh to growth in China's economy given weak domestic demand and that could hurt New Zealand's exporters. In the medium and longer term,

unsustainable fiscal dynamics in some countries and pressure on central bank independence could also be a cause for concern.

So let me summarize. Today the monetary policy committee decided to leave the OCR uh on hold at 2.25%. The recovery is gaining strength and broadening across the economy, but there is still spare capacity. The economic fundamentals are consistent with inflation falling to target midpoint over the next two 12 months, and the committee is confident that we'll reach our inflation target. Of course, as always, if the outlook for inflation changes, the MPC will adjust our monetary policy stance to ensure that inflation returns to 2% target to the 2% target midpoint over the medium term.

So I very much look forward to hearing your questions on our monetary policy statement and I will pass to Scott Sinclair to manage the questions. Scott is over here. >> Thank you governor. I will take your questions now. Please remember to put your hand up and say your name. >> Uh hi Governor Stella Cho from Reuters. Um so in the policy statement you said policy needs to stay accommodated for some time but you also raised the OCR track for Q4 which kind of implies some possibility of a rate hike by the end of the year. I was just wondering was the accommodative phrase a push back against market tightening financial conditions uh is a rate hike by the year end a real possibility in your view >> the forward-looking OCR track. So our projection for where the O will OCR will be going forward is really based on how we see the economy and inflation evolving. So we see that with spare capacity we need to leave the OCR where it is so we have a bit of accommodation uh and then when we see that the recovery is gaining and we're seeing a stronger economic outlook then it's time to gradually normalize policy. Just a quick follow-up question about there's one me member wanting a earlier hike. Do you mind sharing just a little bit discussions around that? >> Yeah, so if you look at in the monetary policy statement we have the record of the meetings and there it reflects the discussions that we had in the committee and one member was discussing the possibility even with the same economic outlook it might be appropriate to tighten a little bit earlier. Another member was pushing some other arguments why we might need to have the OCR on hold for a little bit longer and that's the way it should be in a committee. We we put forward different arguments. We have good discussion but we are in consensus on the decision also on the OCR track. >> Um Anley Thompson from Bloomberg on the track is it fair to say that at the moment you expect to raise rates by the end of the year? I think that currently our best forecast is the OCR track and that indicates that there's a possibility of a rate hike before the end of the year but it's not entirely priced in in our own view by the end of the year.

>> Hi Jenny Ruth from good returns and just business. Um it it doesn't feel like the economy's properly got off its knees yet. Uh is it too early to be discussing potential rises in um the ICR? >> So when we look at the data that we have and the latest data for growth GDP is from the third quarter of last year. So for the September quarter uh but all the new data that we had uh shows that the economy is continuing the economy is continue to recover at the end of the year or beginning of this year. So we do see that we are in the early stages of an economic recovery. Um but it's true that many households will not feel this yet. They're still feeling the high inflation that we had over the past few years. So many businesses are still struggling. But what we are saying is that the data is showing us that we are at the early stages of a recovery and we want to keep the OCR on hold to support the recovery while ensuring that inflation falls back to target. But we're not planning on hiking the OCR until we see more inflationary pressures and a stronger economy. That's the best projection we can do right now. I would just add to that that um monetary policy uh takes a while to transmit through to the economy and so if we look at uh the 2-year swap rate for example that's 270 basis points lower than it was at its peak and that takes time to transmit through to the economy. So we are still expecting to see transmission from prior cuts occurring through this year as well and that will continue to support the economy. There's a statement in the um um in the booklet that you're expecting that house prices will pick up through this year and then continue to grow at the rate of household income growth. What we've seen for decades has been much faster than um household income growth in house prices. So what makes you think that it's going to be slower this time? >> Well, we've seen in the data that households are being very cautious. We've seen that supply of new homes is relatively high. Uh so we do expect to see house prices stabilize and go up over the medium term, but we don't expect the same fast rise in house prices. But maybe Karen and Paul would like to comment a bit. We've also got uh

you would see measures of sustainable house prices uh on that graph and house prices are still a little bit above what we consider to be sustainable house prices which is the basis uh for our view that house price inflation is going to be you know fairly subdued uh over the coming uh year at least compared to what we've had and this is actually you know you're you're right uh Jenny this is a big change for the New Zealand economy and that's why we're highlighting the a downside risk to consumption uh or to household spending without that kicker um from the housing market. We think that uh household spending is going to become more dependent on what happens in the labor market uh rather than what happens in the housing market. And given that we've got a pickup uh in the labor market uh given lower interest rates, we think that is going to you know modestly uh increase house prices going forward.

uh Jana Tipsy from the Herald. Governor, how comfortable are you with where mortgage rates are now? You know, no noting that they've they've risen a bit since November. >> So, we have discussed the fact the financial conditions have tightened, which is part of that and and wholesale interest rates gone up and the mortgage rate has been uh following up. We do think that that might uh be causing some of the caution we see in household spending and also as Paul discussed uh more modest uh house price increases going forward. Uh so we do see um that that is likely dampening demand a little bit currently. >> Um because the market is sort of interpreting the statement it would seem as mildly doubbish um but but kind of as expected from what I can gather at least. Um where do you expect mortgage rates to go in term deposit rates uh you know within the next couple of months? >> Well, we see that markets expectations are very much in line with this decision. So we haven't seen many more movements today in financial markets after the decision decision just came out an hour ago. Uh so we expect this to be approximately what the market were expecting. Karen or Paul would you like to add? So, you know, as we've talked about previously, uh, banks have to take a lot of factors into account when they are setting their mortgage rates, but obviously, um, future expectations of where the OCR is heading is is one of those critical aspects because that feeds into the wholesale rates. And in November, we did see a tightening in financial conditions as the market adjusted its view on where the next uh move in the OCR would be. um you know the traditional uh measures that we've talked about as being that where the average uh home home lending rate is in terms of uh stock of mortgages. We think that's roughly at about 5.1 uh%. It has the potential to move a little bit lower because we still see uh one and twoear rates uh certainly below those levels but it's not the same magnitude that we would have seen prior to the November statement. So, still a wee way to go yet, but but maybe 20 or 30 points at most. >> Is is it not the same magnitude because

of the way people have been fixing their mortgages? >> So, they that's right. So, there's two things that happened. First of all, the one and two year the banks passed through that increase in wholesale rates into the mortgage rates. So, they they lifted um at least initially. Uh and then secondly, the movement. So households moving out of six month uh for example mortgage rates moving much more out into that one and two year which we definitely saw happen post the November statement. So it's a combination. Okay. Um in this statement you also say that the committee noted that labor market conditions are likely to become more important relative to house prices and influencing consumption. >> Yeah. >> Could you please elaborate on that? >> Yes. So we've seen historically that house prices have been important for consumption growth uh in New Zealand and now given that we see that we don't expect house prices to increase that quickly going forward labor market condition be relatively more important and we do see the labor market strengthening this year. So what would be good for household consumption is that more people will be employed. Uh and also that when inflation falls then household purchasing power will be restored. So wages are still subdued but with inflation falling household purchasing power will be higher and that will spot uh support consumption growth and compared to historical trends we think this will be relatively more important. Bernard Hickeyi from the Kaka. Um, where is the economic growth going to come from if there is no faster rise in house prices? Because in the past, people have been able to consume some of that equity growth and it's encouraged them to invest and spend. Without house price growth, they're not encouraged. So, where's it going to come from? I'll start and then I see if you want to add but what we are seeing is that we're seeing some sectors of the economy performing quite well which is for example the agricultural sector we're seeing tourism coming back back exports have been performing well manufacturing is also starting to show positive signs

so we're seeing growth from that and that will also support employment growth but then in addition to that we're starting to see some more business investments we're actually starting to see residential investment as well and then households when employment increases and purchasing power uh gets restored then household consumption will also contribute to growth. So that is really what we expect to see more during this year a broadening of economic growth. Uh Paul and Karen >> yeah like just uh it's going to come from lower interest rates. Uh and it's it's as the governor is saying it's start it's start we're starting to see it already. We're seeing growth broadening out of that a sector out of regional New Zealand uh into some of the metropolitan centers into the manufacturing uh sector and you know construction is sort of starting to get a bit of its mojo back um because of low interest rates. So we are seeing it but you're quite right it's a big change for the New Zealand economy to not have that increase in house price uh as that kicker uh to aggregate demand uh in our economy. Um but there may well have been structural changes in the housing market. That mean an increase in demand for housing no longer equates with higher house prices. It equates with more activity uh more construction. Um so monetary policy still works through that channel. Uh but then consumption is getting driven by a relatively different set of factors which is lower interest rates and what's going on uh in the labor market. And as I mentioned earlier, you know, we do see this as a risk. Yeah, >> this is why we're a bit cautious uh to the downside uh in terms of the strength of the recovery as consumption is a huge part of the economy. Uh and we do need households to uh stop being as cautious uh and get out and and spend uh if we are to see the recovery uh continue to uh broaden. >> Governor, on the inflation side, um tradables non-tradables inflation has sort of um been higher than we all expected in the last couple of years. You mentioned administered inflation in the special topic. >> How important was that administered inflation in the last couple of years

>> in elevating inflation and therefore interest rates? Uh and um what do you think is going to happen to it? >> Yeah. So the OCR has been cut from 5.5 to 2.25%. So even though we saw that inflation headline inflation increased a little bit last year the monetary policy committee was actually cutting the OCR because we saw that underlying inflation what we call core inflation was stable and actually falling. Uh so in that sense we are looking at the drivers of inflation going forward and that's really the main determinance of our monetary policy stance where we expect inflation to be going forward. Administrative prices did um contribute to higher inflation last year, but we do expect them to slow this year. And when we look very detailed into the data, we know that some of the things last year will fall out this year like university fees are not increasing as much, vehicle licenses fees, even electricity fee, line fees will not go up as much. So we are relatively confident that those prices will not increase as much this year as last year. It has been important like it's it's about 9% of the CPI basket and it's been increasing at 8 or 9% you know for the last 12 months. >> Um so what's that? That's you know 6.7 uh on the CPI number is due to uh increases in administered prices but as the governor said you know we're effectively looking through it because the fundamentals in the New Zealand economy are consistent with inflation returning to that 2% midpoint. So what would you say to um the administrators in government in councils? What would you like them to do with those prices? >> Well, it's their decision. That's not our decision. The committee is fully focused on ensuring that inflation returns to the 2% target over the medium term. That's really what we do.

Uh Jana Tipsy from the Herald again. Uh does does the Reserve Bank regret some of the the commentary around the November monetary policy statement that might have um seen those wholesale interest rates go up potentially prematurely? I I I think that currently uh we are very comfortable with the statement that we have today and given that I wasn't here in November is a difficult question to answer to be honest. I I'll Karen that >> um >> look >> you know as we you what you're really talking about is references to how does that transferred into retail right rates and as we've discussed previously they're determined by multiple factors and one of them is around the expectations for the OCR so following that November decision markets did re revise their perspective on where the next interest rate cut would come from. What we saw in terms of a market movement went well beyond where uh the central scenario for the OCR tracks at in terms of what the monetary policy uh had to say. So that was a market decision. It wasn't reflective of what the monetary policy committee was saying at that particular point in time. And that has held up at a at a higher level. And part of that is because markets own interpretation of what they think is happening in terms of economic conditions and what they then perceive their own positions need to be at that particular point in time. And the other thing I would say in terms of market participants, their job in part is to guess what the next move is. And so you will always see a little bit more exaggeration built into it. So uh do I think it's particularly reflective of the coms when I look at the total package from November? No, I don't think uh it was reflective of that. The committee was very confident about its own position at that point in time just as we are confident of our position at this point in time. And I'd note that the market track is still above our own position. >> Uh just put another way, did the bank have to be a little bit more um doubbish today than would otherwise have been the case due to the market response to the November statement?

>> So if we Yeah. No. So I mean the main thing to understand is that what we do is we look for where inflation is heading. >> Yeah. >> And we set the OCR the forward-looking track depending on we how we see the economy evolving and what that means for inflation. >> Yeah. >> So our OCR track is consistent with how we read the economy and where inflation is going and that will always be the case. >> Yeah. Financial conditions is one of the things that we take into account, but it is only one of the factors that we take into account. It's important that we understand the transmission and how that's playing out, but it's the economics as the governor's just talked about that are the most important factors for us. >> Um, Ansley Thompson from Bloomberg again. Um, in the record of meeting, you note the insight from the two members. Is that part of your improved transparency? And is that something we're likely to see more of? >> Well, I think that um we really talked about ensuring that the record of minutes reflected our discussions. I think that has been done before as well. Uh but we are happy to show that there are discussion and that's how it should be in the committee and then we still reached consensus at this time. There could be other meetings where we don't reach consensus but we will strive for consensus. That's what the remmit asks us to do. >> And have you um had any further discussions about the transparency and what you're going to do? >> Yes. So we have uh so there's some parts of that that is in the charter and the charter is uh an agreement between the monetary policy committee and the finance minister. So after this monetary policy round, we'll continue those discussions. There are a few things that uh we are doing right now. one of them uh and I know that the rest of the committee is fine with me saying this but we are planning to move to eight meetings next year and we'll give you the details around that uh hopefully already later this week and that is because next year we'll have monthly CPI. We're really looking forward to

that and that means that we can now move to those eight meetings per year. The other thing that we're doing is that we're focusing on uh outreach and communication. So, uh, for example, over the coming weeks, I'll do a number of events, um, going to Christ Church already tomorrow to meet with businesses, etc. I know that several of my fellow MPC members will also give speeches, talk to businesses, etc. Both to communicate how we see the economy, explain the monetary policy decision, but also to hear in from businesses and households. So, they see the economy evolving. So that's also part of being transparent to to talk about the decision and listen in to see what's happening in the economy.

>> Bernard Hickeyi from the car again. Um could you talk uh governor about uh whether AI and a potential productivity >> increase uh could help over time the Reserve Bank have lower interest rates than would otherwise be the case? >> It's a good question uh and it's not an easy one. So as an economist we know that higher productivity growth is very good for economic growth because it means that you can have higher growth without creating inflationary pressures. uh exactly what it means for interest rates is a little bit more difficult because if you see a productivity boost it might mean that what we call the neutral rate of interest might go up a little bit but overall productivity growth is very good for uh wage growth for real wage growth and also to dampen inflation um we did discuss it uh it's a big discussion internationally whether AI might help uh boost productivity growth we're not seeing it yet. Um, but we know that it's something that would be uh very good for the economy if we saw it going forward. >> I haven't seen any mention of of the Reserve Bank's um use of its balance sheet as as part of um a monetary policy. Do you have any views on what the Reserve Bank should be doing with its balance sheet as part of the monetary policy process? >> No. Well, currently we are just on uh the same path as we've been for a while. So that means that the balance sheet is shrinking and we expect to continue doing that. So some of the bonds will be um they will have matured by mid of 2027 but Karen or Paul you might want to comment a bit more. So, so we do use our balance sheet on a daily basis obviously to ensure that there's sufficient liquidity in the market which is important to have the right conditions so monetary policy can transmit and in order to ensure that um short-term rates remain anchored around where the official cash rate is. So we we're in the market every day uh doing things around that to support uh those aspects. So it's an important you know reason for having a balance sheet uh as we do as um the governor uh just spoke to the large scale asset purchase program is in windown. It's roughly $15 billion still uh to mature or or to uh sell back that will be gone by mid 2027.

Uh so yeah that that will be gone. Um and the funding for lending program is fully repaid as well. >> No plans. So there's no plans to change the trajectory which was set by previous governors and MPCs. Um now that there's a new a new group no >> the official cash rate remains our primary tool.

Um there was some discussion shortly after the pandemic about whether banks should be paid um the OCR on all their like cash held at the reserve bank or at central banks globally. I note that you know obviously as the Laps unwound that the the amount of um reserves have come right down or come down quite a bit but what is your view governor on that? Do you think that the way banks are remunerated is um as it stands is is sort of the right approach. >> We have not been discussing that uh during this monetary policy deliberation. I know the global discussion. I know that some banks have some re some central banks have changed uh how they do that. Um you would have to look at it very carefully to ensure that doesn't affect monetary policy transmission in any way. But we have not been discussing that uh during this monetary policy round. Is it something you've talked to with um the government about? >> Uh I don't think I talked to the government about that. No. Um it's um it's one of those things that um as I said it's a global discussion. Uh but we definitely have not had any deeper discussions on that. No. >> Hi Governor Stella from Reuters again. Um uh so this is your first policy meeting in New Zealand. And uh how did you find it um did you find it different from from your time in Sweden? Like do do you have any reflections on that that you can share? >> No, I'm I'm happy to reflect on that. So you know the mandate is the same is the same. Uh we need to ensure that inflation is low and stable over the medium term and the committee is fully committed to ensuring that we've had excellent discussions with have very good input from staff. Uh so in that sense it's very similar. The process is very similar. Um and you know it's the same commitment from the people working here to the New Zealanders. People really care about the job they're doing. They know it's important. Um and that's very much the same. Uh and that is the key of what we're doing. >> Can I just say from our perspective it's been a great round. We've all really enjoyed it. Uh Tom Preker from the post. Um the the finance minister uh recently dis uh

described the um OC uh the monetary policy review that the bank conducted for its period that that it was managing uh uh monetary policy over the over the over the COVID era as as a window dressing exercise. uh I was keen to check with I guess any members of the of the monetary policy committee whether they believed that that was a fair description. >> Well, I can say that you know as a central bank it's always important to reflect and learn from history uh and we will there's this new investigation and we will work with the reviewers. They're excellent people. Uh, and we will ensure that we give them all the information they're looking for and we will look at the conclusions that they do and we will learn and take that into consideration when we move forward. >> I don't know if Karen or Paul would like to comment. >> Like I uh like we firstly we're required to do that work. It's a legislative requirement that we do it once every 5 years. Um but we would be doing it anyway even if it wasn't a legislative requirement because that's how we learn uh from the past. And that uh review that we did in 2022 was a very honest uh assessment. It was independently reviewed by two uh Larry Shrembrey and Warrick McKibben, two excellent uh global economists. It kicked off a big chunk of our research agenda that's been in play since then. We published a paper at the end of last year on where we're getting to. uh on that research agenda and the papers that we've published. I I sort of ran it, you know, spent time at the productivity commission. So, it was findings and recommendations, you know, what would it have been good to know uh as a committee over that period such as, you know, things like the effect of a supply shock, you know, what's the optimal role of monetary policy uh in in that case and we've done a lot of work uh on that since and it's really paid off. I I think we've pushed our knowledge uh out to the to the global frontier and we've got a lot from it and uh we've put a lot into it. Um and it's it's uh and we're looking forward to doing the next one which will be out at the end of next year. The other thing the other thing I'd just add to that is it wasn't just about uh the uh committee because remembering that it was the

committee that made decisions through co it's not a single individual that is a committee as it is today uh that we all were all involved in that is that it wasn't just about uh economic information uh that was available and at the time or may have not been available at the time. It's also about the tools and so we've undertaken a review of the tools utilized through that period as well and what impact that they had uh and understanding um how we might shape those tools differently moving forward where um you know there there were maybe some outcomes that we would have wanted differently and we again we've printed we've we've provided public transparency around that and uh there are reports on our website uh that go into that you know the An example would be the funding for lending program um which had some uh was structured in a way that uh meant we kept commitments to that. We were required to keep commitments to that uh for a period longer than we would ideally have done. Uh and so we recognize that and you would structure if you were ever to use that tool again, you would structure it slightly differently which would allow you to cease using that uh as market conditions corrected. So um there are there are definitely learnings that came out of it and we've made some really significant adjustments. >> I should add that we published a partial review uh of the tightening cycle uh last year uh and again it pulled no punches. you know, it talked about how our comps could have been better at at various points uh of that uh tightening cycle. And again, we're we're learning from it. I I suggest people read the 2022 review and the mini run that we did last year to decide whether or not those uh that's a window dressing exercise or a legitimate uh effort uh from a central bank uh to be a learning institution. U Mark Dalder from Newsroom just following on from Bernard's question about AI. You saying that you haven't seen any signs of productivity growth in New Zealand linked to AI? Have you seen from your scanning of overseas? Any solid examples of of that happening in overseas economies either? >> Well, there is a discussion currently uh it's always very hard to measure productivity. And it's also very hard to

know exactly where it's coming from and even when you have technological breakthrough it tends to take a while before you see it in the productivity numbers. Uh so we just think it's important to follow but productivity is not only about you know new technologies you can actually do reforms that strengthen productivity in an economy and um Paul is an uh deep expert on this. I also personally have a lot lot of interest in productivity. So we do think it's important to follow and we do think that there is a potential upside for New Zealand with higher productivity growth. >> Thank you for your time. Any just final questions for the governor panel? >> Sorry, just one last question. How are you enjoying life in New Zealand so far? And just do you have any interest in rugby? >> Oh, rugby. Don't get me started. No. So, so, uh, you know, I'm here with my family now and we're really happy to be here. Uh, we think it's a it's a lovely place to live. People are really friendly and, um, you know, on the personal side, um, what what Karen and Paul was talking about, this is an institution where people really want to do a good job. They're willing to listen and learn and to improve over time. And that kind of dynamism is what makes me very confident that we will be doing a good job going forward. So I'm very pleased to be here. Thank you. >> That is times. >> Thank you. Yeah. Thank you all.

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