BNZ Weekly Overview, June 11

Welcome to the June 11 2009 issue of the BNZ Weekly Overview.

The Reserve Bank this morning left their cash rate unchanged at 2.5% and said they intend keeping it low until late-2010. Their comments about the economy were more positive than expected with the result that the NZD has risen one cent to end Thursday night near US 63.5 cents while fixed wholesale borrowing costs have jumped to multi-month highs assisted by rate rises overseas.

Our expectation of all bar very short term interest rates continuing to rise over 2009 remains unchanged. Unchanged also is our belief that the NZ housing market has completed its cyclical price adjustment with data out today from the REINZ showing prices essentially stable at worst in recent months, turnover 44% ahead of a year ago, and the length of time taken to sell a house only just above average.

Full Overview (pdf)

ENDS

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