RBNZ institutional set-up makes forward guidance easier, says Grimes

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The concentration of power in the hands of the Reserve Bank of New Zealand (RBNZ) governor makes it easier for the central bank to issue forward guidance than if it had a committee structure, according to Arthur Grimes, former chair of RBNZ's board of directors.

The RBNZ has issued forward guidance on its key interest rate, the official cash rate, since 1997. Grimes said issuing and updating guidance every quarter "normalises the process" to the point where "no-one bats an eyelid when you change

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