This Bulletin provides an overview of how the Reserve Bank of New Zealand implements monetary policy and manages settlement cash in the banking system. We describe the framework, facilities and market operations we use to ensure that short-term market interest rates trade at or near the Official Cash Rate (OCR) and ensure that there is sufficient settlement cash for payments and settlements to function smoothly. Monetary Policy Implementation The Monetary Policy Committee (MPC) sets the stance of monetary policy by adjusting the level of the Official Cash Rate (OCR). This determines whether monetary policy is a ... (full story)