Still more work to do to get inflation to target

Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr hit newswires early Friday in the Antipodean session while delivering a speech titled “The Monetary Policy Remit and 2% Inflation” at the New Zealand Economics Forum in Hamilton, NZ.

Key highlights:

• The RBNZ has more work to do to get inflation expectations anchored to the 2% target.
• Governor Orr specifically refused to discuss rate targets.
• Non-tradable inflation is moving in the right direction, albeit slowly.
• Bringing core inflation down to within the 1-2% target band is an important part of bringing overall inflation down to 2% target.
• Governor Orr: RBNZ needs to maintain a flexible approach to inflation targeting with a medium-term focus.
• The 2% inflation midpoint target remains appropriate.