The Implementation of Monetary Policy in New Zealand: What Factors Affect the 90-Day Bank Bill Rate?

Alfred Guender and Oyvinn Rimer

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This paper discusses the implementation of monetary policy in New Zealand and its flow-on effects on the 90-day bank bill rate over the 1999-2005 period. The effects of external factors are considered as well. Our findings indicate that the maturity spectrum ratio exerted a positive effect on the 90-day rate while the allotment ratio did not. This interest rate had a tendency to revert to the level set by its Australian counterpart. No such link exists between the NZ 90-day rate and the US 90-day rate. Neither the maturity spectrum nor the allotment ratio contributed to the volatility of the New Zealand 90-day rate.

Keywords: 90-Day Bank Bill Rate; Open-Market Operations; Allotment Ratio; Maturity Spectrum Ratio; Foreign Interest Rate Linkage (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2007-10-29
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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https://repec.canterbury.ac.nz/cbt/econwp/0705.pdf (application/pdf)

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Journal Article: The implementation of monetary policy in New Zealand: What factors affect the 90-day bank bill rate? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:07/05

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