WELLINGTON (Reuters) - Reserve Bank of New Zealand governor Adrian Orr said on Friday that the bank was preparing in case it had to use unconventional monetary tools as the neutral interest rate fell.
"A falling neutral interest rate will increasingly push the Reserve Bank to the limits of conventional monetary policy space," he said in a speech at the Federal Reserve Bank of San Francisco and published on the RBNZ's website.
"We are readying ourselves if we need to act further," he said, adding that the bank was working on developing principles for the use of unconventional policy tools, though its central projection was that it would not have to use them.
(Reporting by Charlotte Greenfield; Editing by Sandra Maler)
