Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr addressed a New Zealand Parliament committee early Thursday, stating that the New Zealand central bank is maintaining a suitably-restrictive policy stance and the RBNZ is likely looking at gauging when to enact further cuts.

Key highlights

CPI returning sustainably to target band of 1-3%

Current economic conditions are poor

New Zealand needs to enhance its potential growth rate

Fiscal policy should enhance potential growth

Staying on hold for a longer duration was unnecessary.

Policymakers aim to reduce output fluctuations

Policy discussions in the future will focus on whether to maintain or reduce rates.

Believes sufficient measures taken to control inflation

CPI requires more frequent re-weighting

Using High-Frequency Data to Improve CPI and GDP Estimations