The implementation of monetary policy in New Zealand: What factors affect the 90-day bank bill rate?

Alfred Guender and Oyvinn Rimer

The North American Journal of Economics and Finance, 2008, vol. 19, issue 2, 215-234

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 bank bill rate while the allotment ratio did not. This interest rate had a tendency to revert to the level set by its Australian counterpart, though at a relatively slow speed. No such link exists between the NZ 90-day rate and the U.S. 90-day rate. Neither the maturity spectrum nor the allotment ratio contributed to the volatility of the most important short-term interest rate in New Zealand.

Date: 2008
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Working Paper: The Implementation of Monetary Policy in New Zealand: What Factors Affect the 90-Day Bank Bill Rate? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:19:y:2008:i:2:p:215-234

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