New Zealand rate cut was leaked

The Reserve Bank of New Zealand reported on the results of an independent investigation, confirming that "highly sensitive and valuable market information" on its March rate cut decision was leaked by a journalist ahead of the official release".

The investigation by Deloitte’s forensic unit found that, contrary to the rules of the lock-up, information on the Bank’s decision to cut the OCR was transmitted by a Newshub Mediaworks reporter to several people in the Newshub office from the media lockup for the Monetary Policy Statement on 10 March.

Governor Graeme Wheeler said: “The leak is a serious and disappointing breach of many years of trust. It created the opportunity for improper gain on financial markets and damage to the integrity of the Bank’s communications.

The response was quite logical: The Reserve Bank had no option but to discontinue embargoed lock-ups for news media and analysts ahead of announcements of interest rate decisions, Monetary Policy Statements and Financial Stability Reports.

Handling public releases of market-sensitive information at central banks is certainly not an easy task, as I have argued earlier. One needs to balance the desire to limit the risk of misreporting with the overarching need to prevent an information leak which would be detrimental to credibility.

Still, I do believe giving information under embargo and organizing embargoed lock ups makes sense. Arrangements just need to be right and tight. In the case of Reserve Bank, they simply weren't.