"The Reserve Bank's projection that inflation will reach 3.8 percent in the current quarter and remain above the target
band until mid next year indicates that the Policy Targets Agreement can cope with unexpected price shocks," Finance
Minister Michael Cullen said today.
"I have read the December Monetary Policy Statement and agree that the Bank's decision to look through the current
spike is appropriate and consistent with the PTA.
"That is also the view of the Treasury and of most commentators," Dr Cullen said.
"I am confident in the Bank's assessment that the spike will be transitory and will quickly pass through the CPI.
"Maintaining low and stable inflation is important for achieving the Government's medium and long term growth strategy,"
Dr Cullen said.