Reserve Bank of NZ becomes cooler: Explains monetary policy decision using cartoons!

There was fair bit of anticipation over the new RBNZ central bank chief- Adrian Orr. He was appointed amidst controversies as the previous Governor was appointed just for 6 months.

RBNZ has also been at  the forefront of pioneering practices in central banking like inflation targeting, increased transparency in communications and so on. Mr. Orr has not disappointed as he has upped the ante by explaining monetary policy using cartoons:

The official interest rate is expected to remain at 1.75 percent for a considerable period.

Global growth continues to support the New Zealand economy 

Global growth continues to support the New Zealand economy

Employment growth continues to be strong

Employment growth continues to be strong

Low import prices have kept inflation low

Low import prices have kept inflation low

Low interest rates will help support employment and raise inflation

Low interest rates will help support employment and raise inflation

We are monitoring a number of risks that could change the economic outlook and lead us to change interest rates

We are monitoring a number of risks that could change the economic outlook and lead us to change interest rates

Superb.

Pictures are worth 100 words and explains much more. It also takes away all that seriousness associated with mon pol and tries to explain its decisions to a wider audience.

“I think our challenge is to speak in plain English as opposed to in a high tech scientific language around which only about half a dozen people understand and even less are interested in,” Orr told reporters at a press conference after he held rates at a record low 1.75 percent “We do need to have a richer dialogue.”

Orr opened his first webcast press conference with a welcome in English, Māori and sign language and was at points knowingly self-deprecating, joking when he turned to one of his deputy governors to check a statistic that he “struggles to divide three by two.”

…..

Orr has engaged in a local media blitz since becoming governor in March, giving interviews to several regional publications, following a RBNZ-commissioned survey that found the vast majority of the general public had no idea who he or the central bank was.

“That’s a good thing on a Saturday at the football ground,” referring to the public’s lack of awareness of his and the bank’s role. But Orr said, it’s “not necessarily a good thing if we’re trying to raise financial literacy and make people think harder about all the things that are important to us.”

He describes himself as CEO, rather than a governor, a role that he sees as encompassing everything from regulation to responsibility for bank notes as well as monetary policy.

 While economists say there’s probably more change in style than substance, Orr’s fresher, open tone is grabbing headlines and more public engagement is likely. “That’s another area we hope to upgrade, the quality of our pictures,” he told reporters. “These were one of the only things we could get immediately out of one of our kids’ icons actually.”

Will other central banks follow? Will we see policy decisions explained more via some kind of a comic?

Having said that, Orr must also be careful of not overdoing this publicity bit. Central bankers who live by media, die by media too!

 

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