“We have to bring inflation back into the target range. But, of course, we have to do it within a reasonable horizon so as not to unnecessarily collapse the economy and turn temporary, slower growth into permanent unemployment.Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said during his address at the New Zealand Economics Forum at the University of Waikato early on Friday in Asia.
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A single mandate is no simpler than a dual mandate.
There are other issues surrounding financial stability and unnecessary volatility.and that’s where the balancing act gets really tricky.
Raising the official cash rate too far or too fast can, for example, cause a severe recession.; spending and investment would plummet, and you would end up with a much higher exchange rate as currency traders would chase the high-yielding New Zealand dollar, and the export sector would be crushed.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
