Reserve Bank's new target divides economists

ARTICLE - As widely expected, the policy targets agreement between the Government and new Reserve Bank Governor, Dr Alan Bollard, has been amended to require him to keep inflation in a 1 to 3 per cent band "on average over the medium term".

Reaction among market economists divided into three camps reported the New Zealand Herald on 18 September.

Deutsche Bank and HSBC, who think monetary policy has been on the tight side over the years, welcomed what they see as a move to a more mainstream target

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