WELLINGTON, Feb 4 (Reuters) - New Zealand central bank Assistant Governor John McDermott said Thursday that the bank's forecasts on interest rates support the effectiveness of its monetary policy but are not a committment to action.
Speaking to the Goldman Sachs Annual Global Macro Conference in Sydney, McDermott said the bank is very open about its monetary policy outlook but stressed the projections are conditional, reflecting the many challenges faced in forecasting the New Zealand economy.
“It is important financial market participants understand that these forecasts are not a commitment to a certain path of policy," he said
He underscored that events since early 2014 highlights the conditional nature of its interest rate forecasts as unforeseen economic events led to weaker-than-expected inflationary pressure in the economy.
As a result the bank "significantly revised down the outlook for short-term interest rates. The Bank will continue to adjust monetary policy as conditions evolve to ensure that price stability is achieved over the medium term," he said.
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