NEW ZEALAND’S EXPERIENCE IN TRANSITIONING TO INFLATION TARGETING
DOI:
https://doi.org/10.5281/zenodo.21515204Keywords:
monetary policy, inflation targeting, inflation expectations, price stability, exchange-rate policy, Trade-Weighted Index, Reserve Bank of New ZealandAbstract
This article examines New Zealand’s experience in transitioning to inflation targeting. Particular attention is paid
to the macroeconomic conditions and institutional factors that motivated the country’s transition to this monetary policy
framework. The study analyzes the role of the Reserve Bank of New Zealand, the evolution of the inflation target, and the
relationships among inflation, GDP growth, and exchange-rate dynamics. It also examines the use of the Trade-Weighted
Index as an indicator of the external value and international competitiveness of the New Zealand dollar. The findings
indicate that the transition to inflation targeting strengthened monetary policy credibility, contributed to price stability, and
provided greater flexibility in responding to domestic and external economic shocks.
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