Figure 1 Shadow Board favours tighter policy over the coming year 100 80

Given the Reserve Bank’s growing arsenal of monetary policy tools which includes the Official Cash Rate, quantitative easing, and Funding for Lending Programme, we decided to simply ask our Shadow Board on what stance the Reserve Bank should take 1) at the upcoming meeting, and 2) over the coming 12 months. [...] For the upcoming meeting, members were generally in favour of leaving the monetary policy stance unchanged given the improving outlook balanced against the high degree of uncertainty. [...] Barring another significant community Knight outbreak of COVID-19, 2021 will be fairly finely balanced between the need to maintain current levels of economic growth, minimising some uncertainty with the rollout of an effective vaccine, and - if the post-COVID upswing begins to impact the economy – managing growing inflation spurred by a strong housing market and balancing the offset of subsequent. [...] I think the RBNZ need to hold the course at the moment. [...] NZIER Shadow Board 4 About the NZIER Monetary Policy Shadow Board NZIER’s Monetary Policy Shadow Board is independent of the Reserve Bank of New Zealand.