Reserve Bank of New Zealand

The Reserve Bank of New Zealand is the central bank of New Zealand. It was established in 1934 and is constituted under the Reserve Bank of New Zealand Act 1989. The Governor of the Reserve Bank is responsible for New Zealand's currency and operating monetary policy. The Bank's current Governor is Graeme Wheeler. Employees of the bank operate under the framework of a managerial hierarchy.The Reserve Bank of New Zealand does not offer financial services to the public nor does it offer deposit insurance, and its website refers people to other financial institutions.OwnershipUnlike the United States Federal Reserve, the Reserve Bank does not have elements of private ownership; according to its website, "The Reserve Bank does not have shareholders. It is 100% 'owned' by the New Zealand Government, with any extra revenue that the Reserve Bank makes going back into the Crown accounts. The Central Bank is not a government department, but is a body corporate whose finances are included in the Crown accounts."Monetary policyPrimary FunctionsThe Reserve Bank's primary function, as defined by the Reserve Bank of New Zealand Act 1989 is to provide "stability in the general level of prices."The Reserve Bank is responsible for independent management of monetary policy to maintain price stability. The degree of price stability is determined through a Policy Target Agreement with the Minister of Finance. Policy Target Agreements are public documents and hence a government cannot secretly change the targets to gain a short term surge in economic growth.The mechanism of this is the Official Cash Rate (a percentage) which affects short-term interest rates. The Bank will provide cash overnight at 0.50% above the cash rate to Banks against good security with no limit. Furthermore, the bank will accept deposits from financial institutions with interest usually at the official cash rate.