The Reserve Bank of New Zealand is New Zealand's central bank.

New Zealanders are lucky it operates the way it currently does. But there is always room for further improvement, and an understanding of what it can and cannot do helps the discussion.

The Reserve Bank of New Zealand (RBNZ) has a number of responsibilities. The main ones are:

1. To maintain the stability of the New Zealand Financial system (https://www.rbnz.govt.nz/financial-stability/), and
2. To keep inflation in New Zealand at a rate as defined in the Policy Targets Agreement - currently between 1 and 3 percent on average over the medium term. (https://www.rbnz.govt.nz/monetary-policy/about-monetary-policy/inflation)
3. Looking after the New Zealand currency
4. Overseeing and operating New Zealand's payment systems.

The RBNZ is a prestigious organisation, it pretty much has its pick of the brightest financial minds in the country, indeed the world. They have people who spend all day, everyday, trying to ensure the RBNZ does what it is tasked with doing. Most of the staff have spent many years of study and most of them have many years of working experience in various banks and other company's and institutions to gain their knowledge and insight.

A successful career at the RBNZ opens many lucrative employment opportunities throughout the world. There is a strong incentive for the people working there to do a good job. Surely it is more likely that they know what they are doing than an economist who doesn't have a job at the RBNZ or a reporter who has a degree in media studies. The RBNZ definitely needs external public review and commentary from the media but so much is simply nonsense from people who seem to think that the RBNZ can control everything. They simply can't, they have one tool to do their job to control inflation - the Official Cash Rate (OCR). Rightly or wrongly they cannot control what other sectors of the economy will do as a result of changes to the OCR. However they can have influence by the tone and contents of public statements made by RBNZ staff, particularly The Governor. 

Over the longer term they can and do change Debt to Income ratios and Loan to Value ratios which affect the amount of money New Zealanders can borrow from banks secured on residential mortgages. This influences the price of houses in New Zealand. But people also borrow on mortgages to spend on things other than houses. The RBNZ cannot directly control how people spend the money they borrow.

The RBNZ also imposes rules on the various institutions - including banks, insurance and finance companies - comprising the financial system. They impose restrictions on the amount of capital companies' must hold. This is intended to ensure the financial system in New Zealand is reasonably safe and secure.

Of course neither the institution nor the staff are perfect, they don't get everything right all the time. But since the current regime was introduced by the Labour Government in the early 1980s the RBNZ has done a pretty good job of both. The New Zealand model has been widely copied by other countries.

The RBNZ CANNOT do whatever it likes or whatever the Government of the day would like. Their actions are strictly controlled by laws and regulations. It is widely regarded as one of the strengths of the New Zealand system that the Reserve Bank acts independently of the Government of the day.

The Reserve Bank of New Zealand website has a section entitled Education which is worthwhile reading if you want to be informed of the facts of how the Reserve Bank of New Zealand works. 

They also have a YouTube Channel with videos in which they attempt to explain important financial concepts and the RBNZ's role.