Closed-door RBNZ talk raises transparency concerns
WELLINGTON: An external member of the Reserve Bank of New Zealand's (RBNZ) Monetary Policy Committee (MPC) will be giving a rare presentation, but it will be behind closed doors.
Prasanna Gai will speak at the Auckland Business Chamber on the topic of 'Monetary Policy and Trade Uncertainty.'
It is an 'exclusive lunch gathering' where Gai will 'share his expert insights on interest rates,' according to the chamber's website. There will be a question-and-answer session after his speech, an RBNZ spokesman said.
However, the event is closed to the media, will not be live-streamed and no speech notes will be published.
'There is no obligation for presentations by MPC members to be public or open to the media. That is up to MPC members to decide,' the spokesman said.
Gai's remarks will be based on the May Monetary Policy Statement, 'so will not include any new information,' he said.
Gai declined Bloomberg's request for an interview.
His presentation follows a split on the MPC over whether to cut interest rates at the May 28 meeting, with one unidentified member voting to hold the Official Cash Rate (OCR) at 3.5% and the remaining five electing to lower it to 3.25%.
The dissenting vote was one of the factors that prompted financial markets to reduce bets on the OCR falling below 3% this year.
'On one hand it's quite encouraging to have an external member of the MPC speaking,' said Brad Olsen, chief executive and principal economist at consultancy Infometrics.
'But having an external speak to a closed audience that not everyone can go to and there aren't any speech notes, you do start to worry a little bit.
'What sort of information is going to be highlighted there that might be said off the cuff, spur of the moment, that gives you a bit more insight into what's coming next?'
Fund manager Simplicity chief economist Shamubeel Eaqub has sympathy for RBNZ policymakers speaking at private events because unfiltered access builds trust in the institution, but he thinks live-streaming the speech or publishing a recording afterwards would aid transparency.
'This whole limiting access thing is a problem,' he said. — Bloomberg
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