Reserve Bank too slow to lift rates in Covid boom - review

<p>The Reserve Bank held interest rates at record lows longer than it needed to during the pandemic, driving inflation to record highs and triggering a boom-bust cycle the country is still paying for, a review has found.</p> <p>The economy "overheated to an historically extreme degree", according to the review's findings released earlier this afternoon by former Reserve Bank assistant governor David Archer and MIT professor Athanasios Orphanides.</p> <p>They also wrote that a law change by the previous government giving the bank a dual mandate to support employment, as well as control inflation, also helped to steer decision-makers away from price stability - but noting it was one of only multiple factors.</p> <p>Finance Minister Nicola Willis, who <a href="https://www.1news.co.nz/2026/02/11/nicola-willis-orders-review-into-reserve-banks-pandemic-decisions/" target="_blank">commissioned the report</a>, said it showed the bank was "too slow to take its foot off the accelerator" back in the period between 2020 and 2021.