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HiFX Data Update – RBNZ Financial Stability Report Release

Press Release – HiFX

The RBNZ has just released its Financial Stability Report . The key points in report are:The RBNZ has just released its Financial Stability Report.

The key points in report are:

Reserve Bank of NZ stability review says financial system remains sound

The banking system holds sufficient capital and liquidity buffers, guided by our prudential regulatory requirements

Household mortgage debt remains high

Financial risk has lessened with both lending and house price growth slowing in the last 12 months

Most dairy farms are currently cash-flow positive, but remain vulnerable to any possible downturn in dairy prices and agriculture shocks

The banking sector is broadly efficient, although some lending allocation remains a vulnerability

The insurance sector as a whole also remains sound, profitable and adequately capitalised

To leave LVR (loan-to-value) restrictions unchanged

Key vulnerabilities include housing, dairy sector indebtedness, banking system exposure to international risks; remained broadly stable over past 6 months

The NZD is little changed in immediate response.

Current indicative levels are:

NZD-USD 0.6880 / 0.6905
NZD-AUD 0.9175 / 0.9200
NZD-EUR 0.5965 / 0.5990
NZD-GBP 0.5185 / 0.5210
NZD-JPY 74.80 / 75.05

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Below is the link to the full RBNZ statement and report:

RBNZ Governor Orr testifies about the Financial Stability Report before Parliament Select Committee at1:10pm today. Expect more comments on the global risks (Italy/EU/China) and the impact of Mycoplasmas bovis disease on the NZ economy.

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