Tuesday 10th May 2016
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Finance Minister Bill English hinted that the Reserve Bank may announce further restrictions to curb the country's housing market as part of its Financial Stability Report tomorrow, according to news reports.
English was asked by reporters if the Reserve Bank should bring in further loan-to-value ratio controls to dampen lending growth in Auckland and other housing markets, as he headed to the National Party caucus meeting in parliament.
"It's up to the bank," English said, according to a report on interest.co.nz. "There's still a bit of uncertainty about just what the dynamics of the Auckland market are. The bank has signaled pretty clearly that it takes the issue quite seriously and they've got a range of tools and they're likely to want to use them."
Asked if he had received advice that the Reserve Bank might be reconsidering its LVR settings, he said: "Not in detail. They've got the Financial Stability Report coming out tomorrow and that will probably signal direction."
The RBNZ's six-monthly gauge of financial stability is due for release at 9am tomorrow, and analysts have speculated that additional curbs on the housing market may free up Governor Graeme Wheeler to reduce interest rates further in the future. The New Zealand dollar fell after English's comments were reported. It was recently trading at 67.45 US cents, from 67.74 cents at 11:41am, immediately before the publication of the article, having touched a six-week low of 67.31 cents.
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