Which bank was the first central bank to adopt an explicit inflation target in 1990?

The Reserve Bank of New Zealand was the first central bank to adopt an explicit inflation target, doing so in 1990. The target was introduced through an agreement between the finance minister and the bank’s governor as part of New Zealand’s monetary-policy reforms.

The initial target aimed to keep annual consumer-price inflation within a narrow band. This approach made price stability a clear, measurable policy objective and increased public accountability for the central bank.

Other central banks later adopted inflation targeting, including the Bank of England in 1992 and the Bank of Canada in 1991. The policy became one of the defining frameworks of modern monetary policy.

The Reserve Bank of New Zealand was founded in 1934, so its creation and its inflation-targeting milestone are different events. Also, the target was not an unchanging promise: the range and wording were revised over time as economic conditions and government agreements changed.