Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

NZ dollar, rate falls after RBNZ details LVR limits

NZ dollar, interest rates falls after RBNZ details LVR restrictions

Aug. 20 (BusinessDesk) – The New Zealand dollar fell about half a US cent and interest rates dropped after Reserve Bank governor Graeme Wheeler detailed the bank’s plans to curb high loan-to-value home lending, which could potentially slow the pace of hikes to the official cash rate.

The kiwi dollar fell as low as 79.76 US cents, and recently traded at 7992 cents, from 80.34 cents before the announcement. The trade-weighted index fell to 75.21 from 75.60. The two-year swap rate fell 5 basis points to 3.435.

The central bank will limit the amount of new lending banks can do on high LVR to 10 percent on Oct. 1, measured as an average over a six-month transition period, Wheeler said in a speech at Otago University in Dunedin.

Allowing for exemptions, that effectively means new home lending with deposits of less than a fifth of a property’s value will amount to about 15 percent of new loans, half the volume of high LVR loans banks were making at the start of this year.

The introduction of the new limits will give the central bank “greater flexibility in considering the timing and magnitude of any future increases in the OCR” which is sitting at a record-low 2.5 percent, Wheeler said.

"The 10 percent speed limit on the high LVR lending was a little bit lower than people thought," David Croy, head of Global Markets Research at ANZ New Zealand. “It is a tighter macro-prudential policy, which means there is less pressure on monetary policy to do the work.”

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Commerce Commission: Appeals Record $2.25m Fine In Vodafone FibreX Case

The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ Limited (Vodafone) for its offending under the Fair Trading Act during its FibreX advertising campaign. While the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, the Commission will argue that it is manifestly inadequate... More>>



All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>


MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>


Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>


DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>



Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>