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March 4, 2021

The Central Bank is ready to face higher inflation risks - RBNZ Governor

 The Reserve Bank of New Zealand (RBNZ) is well positioned to continue fulfilling its mandate amid economic shocks due to Covid-19, said Governor Adrian Orr.


Speaking to the New Zealand Economic Forum on Thursday, Governor Orr also said that the current monetary situation is still needed to meet the central bank's targets.


In addition, he also stressed that there are still health-related uncertainties, but rejects any challenge to monetary policy.



Meanwhile, Governor Orr also said that central banks around the world are ready to raise inflation targets as they continue to struggle with falling prices and uncertainty in the labor market.


Treasury yields have increased recently due to concerns that government spending around the world to support the economy will push inflation beyond the central bank targets faster than expected.


However, Governor Orr said the world was no longer focused on concerns over the high inflation problem, which had long targeted the central bank's target.


The world's biggest challenge today is falling prices, deflation and uncertainty in the labor market. Every central bank is currently in talks to raise its inflation target higher, Governor Orr said.