RBNZ’s Wheeler: A lower NZD needed to increase inflation and deliver balanced growth
|The Reserve Bank of New Zealand (RBNZ) Governor Wheeler crossed the wires now, via Reuters, making his scheduled speech titled "Reflections on the stewardship of the Reserve Bank".
Main Headlines:
In the absence of major unanticipated shocks, prospects look promising for continued robust economic growth in NZ over the next two years
The greatest risk we face at this stage relates to the inflated global asset prices and the continuing build up in global debt
Loan-to-value ratio (LVRs) are not expected to be a permanent measure, but their removal would require a degree of confidence that financial stability risks won't deteriorate again
There's a risk of a housing market resurgence if LVRs were removed at this time
Long-term inflation expectations remain well anchored at the target mid-point of 2 percent
Would not use DTIs while housing market continues to moderate
A lower New Zealand dollar is needed to increase tradables inflation and help deliver more balanced growth
Further surge in house prices can't be ruled out as mortgage rates are low, net migration flows strong
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