Photo: RNZ
Analysis - The setting of the Reserve Bank's monetary policy committee meetings to set the official cash rate (OCR) every six weeks or so is the closest New Zealand has to a Papal Conclave, but without the brightly coloured clothing and smoke out the chimney.
The Committee was set up in 2018, replacing the Governor as the sole official decision maker on interest rates, with four RBNZ officials being joined by three external members.
The change was explained as New Zealand finally adopting "best practice" of other central banks around the world, where a diverse range of the suitably qualified members are expected to bring different perspectives making for better decisions.
Contrary to the practice of many of the big central banks, which vote on what to do with interest rates, the RBNZ prefers to arrive at a consensus, implying some form of collegial unanimity.
Two rare occasions -- a vote
But just twice the consensus and conformity have been tested by the extent of differences to force a vote.
The first was in May 2023, when the MPC voted 5-2 to raise the OCR by 25 basis points 5.5 percent rather than stay on hold at 5.25 percent.
That increase proved to be the peak of the RBNZ's tightening cycle.
The second was the RBNZ's latest decision, with one member voting for keeping rates on hold and the other five opting for a 25 basis point cut to 5.25 percent.
Like the cardinals in the Vatican, who voted for whom remains a secret. At many other central banks it's quite clear who voted for what option and why.
Governor Christian Hawkesby explained the vote in both cases has come at a time when the RBNZ is at a "point of inflection", and so a more broad range of opinions and options was being debated.
In 2023 the RBNZ was near the end of its rate rises and in 2025 it is near the bottom.
Which highlights another issue about the monetary policy committee -- publicly it has remained in the shadow of the RBNZ Governor.
The external members are known, they often sit in the front row of monetary policy news conferences -- mute.
It is the governor and a couple of senior officials who do the talking at the conference, and who do the press interviews in following days as they sell the latest decision.
At various overseas central banks the external members do speak publicly, within guidelines, and express their opinions, even if they are dissenting.
But in another RBNZ surprise, an external member of the committee, Prasanna Gai, a professor of macroeconomics at the University of Auckland, will speak at an Auckland Chamber of Commerce event on monetary policy and trade uncertainty on June 12.
However, any excitement of such a first is tempered by the advice there will be no speech notes, the event is not being streamed, and no interviews.
