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Abstract
The Reserve Bank of New Zealand Act of 1989, which established the independence of the Reserve Bank of New Zealand (RBNZ, New Zealand’s central bank) and set the single objective of price stability for the country’s monetary policy, came into force in 1990. The first Policy Targets Agreement (PTA) specifically defining the inflation target was signed in March of that year. However, in New Zealand the adoption of the concept and practice of inflation targeting, in the sense of an announced, numerical target, is dated from April 1988. Indeed, several years before that, in the middle of 1984, the government had made it clear that the achievement of low inflation was a key objective of its economic policy agenda.
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