Press Release

September 2005 Reserve Bank Bulletin released

The Reserve Bank today released the September 2005 issue of the Reserve Bank of New Zealand Bulletin.

Last year the Basel Committee released a new capital adequacy framework known as Basel II. The first article provides an introduction to the Basel II framework and outlines the Reserve Bank's plans to adopt the framework here in New Zealand.

The second article examines recent rends in foreign exchange market turnover. It finds that trading of the New Zealand dollar has increased significantly over the past few years, and by more than for many other currencies. Of note, is the extent to which that turnover now occurs offshore rather than in the domestic foreign exchange market.

The third article provides an update on the market for offshore issues of New Zealand dollar denominated bonds, commonly known as Eurokiwis and Uridashis. Issuance of these bonds has been very strong over the past two years, with domestic interest rates high relative to those in the rest of the world. The article explains the incentives to issue and purchase these bonds, and the role that these bonds play in enabling New Zealand to access the foreign capital market.

The final article discusses the rationale underpinning the five-yearly funding agreements for the financing of the Reserve Bank's operating expenditures. The article looks at the processes by which these agreements are reached and the accountability measures in place to monitor the use of resources.

Finally this issue also contains a recent speech by the Governor on the New Zealand payments system. The speech emphasises that ensuring a sound and efficient payments system is an important part of the Bank's financial stability role.

You can view the September 2005 Reserve Bank Bulletin at the following link: http://www.rbnz.govt.nz/research/bulletin/

ENDS

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