Reserve Bank of New Zealand - wikipedia Reserve Bank of New Zealand Reserve Bank of New Zealand Te Pūtea Matua ( Māori ) Reserve Bank of New Zealand logo RBNZ headquarters in Wellington Headquarters Wellington, New Zealand Coordinates 41 ° 16 ′ 44 '' S 174 ° 46 ′ 30 '' E ﻿ / ﻿ 41.278814 ° S 174.77503 ° E ﻿ / - 41.278814 ; 174.77503 Coordinates : 41 ° 16 ′ 44 '' S 174 ° 46 ′ 30 '' E ﻿ / ﻿ 41.278814 ° S 174.77503 ° E ﻿ / - 41.278814 ; 174.77503 Established 1934 Governor Graeme Wheeler Central bank of New Zealand Currency New Zealand dollar NZD ( ISO 4217 ) Reserve requirements None Interest rate target 2, 00 % ( OCR ) Interest on reserves 3 % Website www.rbnz.govt.nz The Reserve Bank of New Zealand ( RBNZ, Māori : Te Pūtea Matua ) is the central bank of New Zealand. It was established in 1934 and is constituted under the Reserve Bank of New Zealand Act 1989. The Governor of the Reserve Bank is responsible for New Zealand 's currency and operating monetary policy. The Bank 's current Governor is Graeme Wheeler. Employees of the bank operate under the framework of a managerial hierarchy. The Reserve Bank of New Zealand does not offer financial services to the public nor does it offer deposit insurance, and its website refers people to other financial institutions. Contents 1 Ownership 2 Monetary policy 2.1 Primary Functions 2.2 Fractional - reserve banking 3 Issuing of currency 3.1 Collectors coins 4 Supervision of the New Zealand Banking system by the Reserve Bank 5 Regulation of non-bank deposit takers ( NBDTs ) 6 Prudential supervision of the New Zealand insurance industry by the Reserve Bank 6.1 History 7 List of Governors 8 See also 9 References 10 External links Ownership Unlike the United States Federal Reserve, the Reserve Bank does not have elements of private ownership ; according to its website, `` The Reserve Bank does not have shareholders. It is 100 % ' owned ' by the New Zealand Government, with any extra revenue that the Reserve Bank makes going back into the Crown accounts. The Central Bank is not a government department, but is a body corporate whose finances are included in the Crown accounts. '' Monetary policy Primary functions The Reserve Bank 's primary function, as defined by the Reserve Bank of New Zealand Act 1989 is to provide `` stability in the general level of prices. '' The Reserve Bank is responsible for independent management of monetary policy to maintain price stability. The degree of price stability is determined through a Policy Target Agreement with the Minister of Finance. Policy Target Agreements are public documents and hence a government can not secretly change the targets to gain a short term surge in economic growth. The mechanism of this is the Official Cash Rate ( a percentage ) which affects short - term interest rates. The Bank will provide cash overnight at 0.50 % above the cash rate to Banks against good security with no limit. Furthermore, the bank will accept deposits from financial institutions with interest usually at the official cash rate. Banks that offer loans at interest higher than the official cash rate will be undercut by Banks that offer cheaper loans, and banks that loan out lower than the official cash rate will make less compared to other banks which can simply deposit their money in the Reserve Bank with a higher rate of return. The Reserve Bank borrows and offers loans with no limit on volumes in order to ensure that the interest rate in the market remains at the Official Cash rate level. Through controlling this, the Reserve Bank can then influence short term demand in the New Zealand Economy and use this to control prices. Adjustments to the official cash rate are made eight times a year. It can make unscheduled adjustments but does not usually do so. Fractional - Reserve banking Like all modern monetary systems, the monetary system in New Zealand is based on fiat and fractional - reserve banking. In a fractional - reserve banking system, the largest portion of money created is not created by the Reserve Bank itself, 80 % or more is created by private sector commercial banks. Issuing of currency The Bank by virtue of the Reserve Bank Act has the sole right of issuing New Zealand legal tender notes and coins. The Reserve Bank controls the issuing of currency to banks and also replaces used and damaged money from circulation. In March 2005 the bank decided to remove the 5 cent coin from circulation ( the following year ), as well as reducing the size of 10, 20 and 50 cent coins. The Reserve Bank accepts all New Zealand currency for payment at face value. This applies to all demonetised or withdrawn currency, however such currency need not be accepted by money changers as it is no longer legal tender. All decimal notes are legal tender except $1 and $2 notes as these have been withdrawn. Damaged notes are still worth something so long as they are recognisable. The Reserve Bank website notes that as a rule of thumb if there is more than half a bank note they will pay its full value. To receive payment people have to turn in the note to either the Reserve Bank in Wellington or any bank. Collectors coins The Reserve Bank from time to time produces limited runs of legal tender coins for collectors and have a New Zealand theme and design. These coins do not circulate, but are legal tender. The Coins are sold for the Reserve Bank via New Zealand Post 's business unit. Supervision of the New Zealand banking system by the Reserve Bank The Reserve Bank also acts to supervise the New Zealand banking system to ensure that the system remains healthy, however it does not guarantee that a bank will not fail, or face problems. As of February 2016 there are 25 registered banks. All registered banks operating in New Zealand must issue a quarterly disclosure statement, and the Reserve Bank supervises these. The purpose of these disclosure statements is to : Assist depositors to make sound decisions Encourage banks to maintain sound banking practices The summary comprises : A Key Information summary that provides a brief overview of the bank 's financial condition General Disclosure statement to provide comprehensive information on the bank Supplemental Disclosure Statement More information, see list of registered banks at the RBNZ website. Regulation of non-bank deposit takers ( NBDTs ) Under Part 5D of the Reserve Bank of New Zealand Act 1989 ( the `` Act '' ), the RBNZ is charged with the enforcement of the credit rating and prudential requirements applying to non-bank deposit takers ( NBDTs ) in New Zealand. These functions were introduced by the enactment of the Reserve Bank of New Zealand Amendment Act 2008. Further amendments to Act have been foreshadowed to complete the regulatory framework for the NBDT sector. Prudential supervision of the New Zealand insurance industry by the Reserve Bank Under section 12 of the Insurance ( Prudential Supervision ) Act 2010, the RBNZ is charged with the prudential supervision of the New Zealand insurance industry. This includes the licensing of persons to carry on insurance business in New Zealand. History The Reserve Bank of New Zealand was established from 1 August 1934 by the Reserve Bank of New Zealand Act 1933. The Reserve Bank first issued banknotes in 1934, see New Zealand pound. List of governors The following have served as governors of the Reserve Bank : Leslie Lefeaux ( 1 January 1934 -- 31 December 1940 ) William Fox Longley Ward ( Acting Governor : 1 May 1941 -- 1 February 1944 ), ( 1 February 1944 -- 8 July 1948 ) Edward Coldham Fussell ( 21 July 1948 -- 20 July 1962 ) Gilbert Wilson ( 21 July 1962 -- 20 July 1967 ) Sir Alan Low ( 21 July 1967 -- 11 February 1977 ) Raymond W.R. White ( 12 February 1977 -- 11 February 1982 ) Dick L. Wilks ( 12 February 1982 -- 17 May 1984 ) Sir Spencer Russell ( 18 May 1984 -- 31 August 1988 ) Dr Donald Brash ( 1 September 1988 -- 26 April 2002 ) Dr Alan Bollard ( 23 September 2002 -- 25 September 2012 ) Graeme Wheeler ( 26 September 2012 -- present ) See also New Zealand Dollar References Jump up ^ Singleton, John ( 11 April 2012 ). `` Reserve Bank ''. Te Ara - the Encyclopedia of New Zealand. Retrieved 19 April 2012. Jump up ^ `` Monetary policy in ` Interesting Times ' ''. rbnz.govt.nz. Jump up ^ `` Policy Targets Agreement '' ( PDF ). rbnz.govt.nz. Jump up ^ `` New Zealand Post Coins ''. nzcoins.co.nz. Jump up ^ `` Register of registered banks in New Zealand ''. rbnz.govt.nz. Jump up ^ `` Overview of NBDT regime ''. rbnz.govt.nz. Jump up ^ `` Governors of the Reserve Bank - past and present ''. Reserve Bank. Retrieved 9 February 2016. External links Wikimedia Commons has media related to Reserve Bank of New Zealand. Official website List of registered banks in New Zealand Overview of the role, structure and governance arrangements of the Reserve Bank Reserve Bank of New Zealand, Who They Are Central banks Global Bank for International Settlements Basel Committee on Banking Supervision Financial Stability Board Policies Capital requirement Contractionary monetary policy Expansionary monetary policy Basel II Basel III Basel 4 Implementation Capital control Discount rate Interest rates Money creation Open market operation Sovereign wealth fund Bretton Woods system International Monetary Fund World Bank Group International Bank for Reconstruction and Development International Centre for Settlement of Investment Disputes International Development Association International Finance Corporation Multilateral Investment Guarantee Agency Lists List of central banks Central banks and currencies of Africa Central banks and currencies of Asia - Pacific Central banks and currencies of the Caribbean Central banks and currencies of Europe Central banks and currencies of Central America and South America New Zealand currency Coins 10c 20c 50c $1 $2 Banknotes $5 $10 $20 $50 $100 Withdrawn Coins : 1c 2c 5c Banknotes : $1 $2 Historic ( before 1967 ) Pound sterling ( UK ) New Zealand pound Related topics Banks : Reserve Bank of New Zealand Currencies : AUD, NZD Transactions : Swedish rounding Economy of New Zealand History Head tax, 1881 IC&A Act, 1894 Wool boom, 1951 Black Budget, 1958 Think Big, 1979 -- 84 Rogernomics, 1984 -- 90 Ruthanasia, 1990 -- 93 Mother of all Budgets, 1991 Leaky homes crisis, 2000s Finance company collapses, 2006 -- 12 Currency New Zealand dollar Dollar banknotes twenty Dollar coins one Twenty - cent coin New Zealand pound Government Taxation New Zealand Treasury New Zealand budget New Zealand Trade and Enterprise Reserve Bank of New Zealand Official Cash Rate Overseas Investment Office Commerce Commission KiwiSaver Industry Agriculture New Zealand Meat Producers Board New Zealand Dairy Board New Zealand Wool Board Beer Fishing Aquaculture Whaling Forestry Woodchipping Kauri gum Licensing trust Mining Tourism Wine Economic conditions Social class Income Poverty International rankings Agreements Closer Economic Relations Free trade agreements Malaysia China Trans - Pacific Strategic Economic Partnership Australian and New Zealand Standard Industrial Classification Unions and lobbyists Campaign Against Foreign Control of Aotearoa New Zealand Business Roundtable New Zealand Council of Trade Unions The New Zealand Institute Retrieved from `` https://en.wikipedia.org/w/index.php?title=Reserve_Bank_of_New_Zealand&oldid=793827768 '' Categories : Banks of New Zealand Banking in New Zealand Central banks Government agencies of New Zealand Economy of New Zealand Banks established in 1934 1934 establishments in New Zealand Hidden categories : Use British English from August 2011 Use dmy dates from August 2011 Coordinates not on Wikidata Articles containing Māori - language text Talk Contents About Wikipedia Deutsch Español Français Bahasa Indonesia 日本 語 Norsk Polski Русский Українська 中文 Edit links This page was last edited on 4 August 2017, at 06 : 29. 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Question: who owns the reserve bank of new zealand
Answer: New Zealand Government