Welcome to the October 9 2008 editions of the BNZ Weekly Overview and Offshore Overview.
The deterioration in global financial markets has continued strongly over the past week with collapsing sharemarkets,
major weakness in the Kiwi dollar at one point below 58.0 cents last night, and central banks forced to inject more
money into their national financial systems plus cut interest rates. Australian interest rates have been cut 1% and we
expect probably a 0.75% reduction from our central bank on October 23.
During the week we have received confirmation that the surge last month in business and consumer confidence in New
Zealand was a blip with sentiment falling away relatively strongly in our own survey and others during the week.
Prospects for the New Zealand economy have deteriorated in light of recent events offshore. While the earlier than
expected fall in the Kiwi dollar and interest rates will please many businesses, for the next 12 months these positives
will be offset by the global economy probably going into recession. Prospects for tourism and residential construction
look especially poor.
In both the Weekly Overview and Offshore Overview we attempt to explain in simple terms what has been happening
Bank of New Zealand
Be good with money
Bank of New Zealand (BNZ) has been a big part of New Zealand life for over 150 years since its foundation in 1861. The
bank employs over 5,000 people and has more than 170 retail stores and 32 Partners business centres across the country.
Passionate about enabling a higher achieving New Zealand, BNZ works with personal, business, agri, and private wealth
clients, helping them grow and make their goals a reality.
A subsidiary of the National Australia Bank Group of companies, BNZ is governed locally by a Board of Directors and
strives to help New Zealanders be good with money.