Financial Stability Report Signals Relief

The Reserve Bank of New Zealand (RBNZ) has released its twice-yearly Stability Report as the global growth weakens and the sovereign debt crisis escalates inEurope, signalling some relief to New Zealanders.

In his statement Dr Allan Bollard said, “Risks toNew Zealand’s economy and financial system have increased in recent months.”

However he went on to signal some relief ahead in the coming months as the New Zealand Banking System is now better placed to weather global shock, as banks have increased their capital buffers and lengthened the maturity profile of wholesale funding.

His comments also added to the view that the RBNZ has no immediate plans to raise the Official Cash Rate (OCR).

The RBNZ held the OCR steady at 2.50% at its October board meeting given ongoing global economic and financial risks. Most economists are now expecting the first rate hike late in the first quarter of 2012.

To discuss your interest rate strategy following the latest interest rate announcement, or to find the right home loan for your next property purchase, contact me for a personalised home loan assessment.

 

* Reserve Bank of New Zealand Financial Stability Report November 2011.

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