RBNZ talks about new tools
Governor Graeme Wheeler said, in his first Monetary Policy Statement, that the Reserve Bank and The Treasury are working on a Memorandum of Understanding about the tools that could be used in the future to manage asset bubbles without hurting the wider economy.
He said they had reached an agreement and the MoU was presented to FInance Minister Bill English yesterday.
As well as loan-to-value restrictions, the bank is looking at introducing further changes to the core funding ratio, a counter-cyclical capital buffer, and risk weightings on asset classes.
The Auckland housing market in particular is showing signs of increasing strength, with prices up 12% year-on-year. But the high dollar is hurting exporters and a hike in interest rates could exacerbate that.
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