Published June 1, 1999 | June 1999 issue
National currency: New Zealand dollar
The Reserve Bank of New Zealand, established in 1934, is the country's central bank and has three main functions. These are:
operating monetary policy to maintain price
promoting the maintenance of a sound and efficient financial system;
meeting the currency needs of the public.
Another duty is to screen and, where appropriate, register banks, and to supervise the banking system. The Reserve Bank also oversees and operates in financial markets and manages the country's foreign exchange reserves, offers registry and depository services, and provides the administration for the Overseas Investment Commission. When the government wants to borrow in New Zealand dollars, the Reserve Bank raises the funds on behalf of the Treasury.
The Reserve Bank of New Zealand Act of 1989 provides the Reserve Bank with its statutory powers and obligations. As a result, the Reserve Bank is not a conventional government department or state agency. Instead, the 1989 Act gives the Reserve Bank autonomy in the way it achieves price stability.
The governor, who is appointed by the treasurer and is personally accountable to the government for the bank's performance, guides the activities of the Reserve Bank. However, in most areas, and especially monetary policy, the governor has statutory independence as to how outcomes are achieved.
New Zealand's currency was denominated in pounds, shillings and pence until 1967 when the country moved to the decimal system of dollars and cents. The bank recently redesigned its currency and moved from paper notes to flexible polymer plastic.
The Reserve Bank employs about 300 staff at its headquarters in Wellington and its currency processing branches in Auckland and Christchurch.
For more about the Reserve Bank of New Zealand, go to: rbnz.govt.nz.