Economist outlines transparency reforms for incoming RBNZ leadership
Westpac chief economist Kelly Eckhold says the incoming governor of the Reserve Bank (RBNZ) will face important decisions on how the central bank sets and communicates monetary policy.
“Recent commentary from both the minister of finance and the prime minister indicates that the appointment process for a new permanent governor of the RBNZ is well advanced. An announcement
might arrive within the next few weeks,” Eckhold (pictured right) said in his latest Economic Bulletin.
The note outlines a range of reforms that could improve transparency, accountability, and market confidence in monetary policy settings.
The comments come after four consecutive RBNZ rate cuts in 2025, with the OCR now at 3%. While easing has provided relief to borrowers, markets remain watchful of how the incoming governor will manage monetary policy going forward.
Regular MPC votes to boost transparency
One of Eckhold’s key recommendations is for the Monetary Policy Committee (MPC) to adopt regular formal votes at each official cash rate (OCR) review, a practice already in place at the US Fed, Bank of England, Bank of Japan, and Sweden’s Riksbank.
Currently, RBNZ has held formal votes only three times in recent years – May 2023, May 2025, and August 2025. On other occasions, the Statement of Record has noted options considered but without an official vote.
Eckhold noted that “regular, publicised votes at every OCR review would significantly enhance the transparency of the RBNZ’s decision-making.”
Publishing how MPC members vote
A logical extension of formal voting is publishing which options individual MPC members supported. Eckhold said such transparency would improve accountability and help markets and the public understand the diversity of views within the committee.
While anonymity is currently designed to encourage frank debate, Eckhold pointed to international practice: “The Fed and Bank of England, for instance, have successfully balanced transparency with the protection of individual reputations, and their example underscores the value of openness.”
Wider range of views needed
Eckhold also recommended publishing more detail on the range of committee views regarding the balance of risks around RBNZ’s forecasts. Drawing parallels with the Fed’s practice of releasing histograms of members’ risk assessments, he said this would give markets better insight into policy debates and potential shifts.
More communication opportunities
Eckhold argued for press conferences after every MPC meeting, not just those that coincide with a Monetary Policy Statement. He also called for more frequent speeches from non-RBNZ MPC members to provide markets with a broader sense of internal views.
“Encouraging more frequent speeches by MPC members would enhance transparency and allow for a broader exchange of ideas,” he said.
Reviewing the OCR calendar
The scheduling of OCR reviews is also under discussion. Eckhold noted the Ministry of Finance has signalled a desire to shorten the long gap between November and February meetings.
He suggested that expanding the number of OCR reviews and aligning Monetary Policy Statements to a March, June, September, December cycle would provide a more consistent flow of policy decisions and information.
Inflation target in the spotlight
Another potential reform could involve revisiting RBNZ’s -3% inflation target. Inflation has averaged around 2.6% over the past 25 years, with outcomes more often above the 2% midpoint than below.
“A 2.5% inflation target (perhaps expressed as a 2–3% range, to align with the RBA’s target) might better match New Zealand’s historical capacity to deliver price stability and bring expectations closer to reality,” Eckhold said.
The Westpac economist added that a change would require adjustments to the MPC’s Remit and support from the minister of finance.
Why this matters for mortgage advisers
For mortgage advisers, these reforms could have real impacts on rate expectations and client decision-making. More transparent voting, risk disclosure, and regular communications could reduce volatility around OCR announcements, giving borrowers greater confidence in planning.
A potential shift to a higher inflation target would also carry implications for long-term interest rate settings, mortgage pricing, and how banks assess borrower serviceability.
Read the full Westpac Economic Bulletin here.
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