New Reserve bank Governor Adrian Orr sent a strong message to the market with his first monetary policy statement today.

The material economic information – the outlook for interest rates - remains largely the same.

There was a subtle shift - the forecast for the next rate rise pushed out further into 2019 and an explicit reminder that things change and the next move could also be down.

The wording of monetary policy statements is always very carefully chosen and this one was no different.


So make no mistake, times have changed.

There was the brief Māori greeting and farewell, appropriately formal, but still a first in this environment.

At the press conference there even some sign language from the Governor – for which he apologised, as it was his first attempt.

Then there was the cut to the chase.

All the most relevant information was in the first two lines of the copy. Shocking, I know.

Historical precedent has been to include the rates outlook as a last line - as if it was the dessert to be earned only after the meat and potatoes of the domestic and international analysis was digested.

"The Official Cash Rate (OCR) will remain at 1.75 per cent for some time to come. The direction of our next move is equally balanced, up or down. Only time and events will tell," the statement began.

Compare that with a typical last line from previous statements:


"Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly."

They say the same thing but the latter doesn't translate to any real conversation.

A similar tone remained throughout.

It's a significant and very deliberate shift – towards a more accessible and less arcane institution.

It was the language of an economist who has built a career on his ability to communicate and de-mystify the complexities of his profession.

In the press conference this morning Orr was serious in tone.

Of course, the language did get technical at times. The interest of financial commentators in issues like inflation forecasting and output gaps forced Orr to go there.

But he wasn't shy of responding bluntly and honestly to questions from the floor. Or calling them out if they didn't meet the grade.

"That's a statement. What would be the question?", Orr said at one point, addressing one of the pet hates of many conference attendees the world over.

Are you relieved by the fall in the currency?

"Relieved would be an emotion and I don't have emotions about currency," he quipped, offering a personable reminder of inherently impersonal nature of central banking.

He stopped short of jokes and one-liners, but there were anecdotes.

In a nod to the monetary policy "sweet spot" (his words) that he has inherited, Orr recalled being told once that: if you have a difficult choice to make about whether to raise or cut rates then you are probably in a good place.

Questioned about the risk that new style might open him up to misinterpretation by the market, he drew on a classroom anecdote: "Sorry, my essay was so long Sir, I didn't have time to write a short one."

The Reserve Bank's job was to explain things clearly for more than just "a handful of retail bank economists", he said.

"Our challenge is to speak in plain English".

If today's monetary policy statement was a sign of things to come, then Orr has made a great start.