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Reserve Bank Governor Faces Parliament Scrutiny

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  Published in Business and Finance on Tuesday, February 10th 2026 at 2:46 GMT by rnz
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Wellington, New Zealand - February 10th, 2026 - Reserve Bank Governor Anna Breman is currently appearing before the Parliament's Finance and Expenditure Committee, enduring a rigorous session of questioning from Members of Parliament. The proceedings, being livestreamed for public consumption, center around the Reserve Bank's recent performance, the persistently high cost of living impacting New Zealand families, and the bank's overarching strategy to bring inflation back within the target range.

Governor Breman is expected to address mounting pressure regarding the efficacy of current monetary policy. While inflation has demonstrably cooled from its peak of 7.3% in late 2024, it remains stubbornly above the Reserve Bank's target of 1-3%. This persistent inflation is contributing to a challenging economic environment where households are grappling with increased prices for essential goods and services, from food and fuel to housing and healthcare.

The Finance and Expenditure Committee is particularly focused on the bank's forward guidance - the communication used to signal its future intentions, what it intends to do, and why. The effectiveness of this guidance in shaping market expectations has come under scrutiny. Critics argue that inconsistent messaging and overly optimistic projections have contributed to market volatility and eroded public trust in the central bank.

"The key here isn't just what the Reserve Bank does, but how they communicate it," explained Dr. Eleanor Vance, a senior economist at Victoria University of Wellington. "Clear, consistent forward guidance is crucial for anchoring inflation expectations. When the market anticipates the bank's actions, it can adjust accordingly, smoothing the transition and minimizing economic disruption. If that trust is broken, the bank loses a powerful tool."

Beyond inflation, housing affordability is poised to be a significant topic of debate. Despite interest rate hikes aimed at curbing demand, house prices have shown resilience, particularly in major urban centers like Auckland and Wellington. MPs are likely to press Governor Breman on whether the Reserve Bank believes its monetary policy is effectively addressing the housing crisis, or if alternative measures, such as government intervention in the housing market, are necessary.

The session arrives at a sensitive time for the Reserve Bank, which has recently faced increasing debate about its independence. Concerns have been raised regarding potential political interference and the need to safeguard the bank's ability to make objective decisions based solely on economic data. Some parliamentarians have alluded to international examples of central bank mandates being broadened to include considerations beyond price stability, such as employment and climate change, sparking a wider discussion about the appropriate scope of the Reserve Bank's responsibilities.

Adding to the complexity, the broader economic outlook remains uncertain. Global economic growth is slowing, geopolitical tensions are escalating, and supply chain disruptions continue to pose challenges. These external factors are impacting New Zealand's economy and complicating the Reserve Bank's task of managing inflation and maintaining financial stability. The committee is likely to seek Breman's assessment of these risks and her strategies for mitigating their impact.

The questioning will also likely extend to the Reserve Bank's use of unconventional monetary policies, such as quantitative easing, implemented during the COVID-19 pandemic. While these measures were credited with cushioning the economic blow of the pandemic, they have also been linked to the subsequent surge in inflation. MPs will seek to understand the lessons learned from this experience and how the Reserve Bank intends to avoid similar pitfalls in the future.

Governor Breman's testimony is crucial not only for providing transparency and accountability but also for shaping the economic narrative and influencing future policy decisions. The livestream is being closely watched by financial markets, economists, and the public alike, all eager to gauge the Reserve Bank's assessment of the current economic landscape and its plans for navigating the challenges ahead. The coming months will be critical in determining whether the Reserve Bank can successfully steer New Zealand towards a period of sustainable economic growth and price stability.