Pressure on interest rates
Wholesale interest rate swap yields have been rising since the beginning of the year, putting pressure on banks to raise their interest rates.
The most notable wholesale rises have been in the middle of the swap curve, for terms between three and seven years.
Westpac chief economist Dominick Stephens said that for a while that rise had been tempered by a drop in the margin banks have to pay over the top of those wholesale rates.
An improving global financial situation had made overseas lenders more willing to lend to New Zealand, he said. “At the moment New Zealand is considered a fantastic bet so the margins have been coming down.”
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