RBNZ Governor Wheeler media conference post RBNZ OCR meeting

RBNZ Governor Wheeler media conference post RBNZ OCR meeting

The Reserve Bank Governor Graeme Wheeler is currently holding his post RBNZ OCR meeting media conference.

His key points are:
• Reserve Bank of NZ says future interest rate decisions will be driven by data
• RBNZ says view on rates has not changed much since previous rate decision
• Will talk to Finance Minister about macro-prudential tools in next few weeks
• One further cut built into interest rate projections
• Tourism, jobs growth, construction among drivers supporting NZ economic growth
• Inflation expectations have stabilized, some inflation pressure coming through
• Further monetary stimulus would have lead to further upward pressure on housing market
• Picture will be much clearer by August Monetary Policy Statement after GDP & CPI data
• Can’t ignore Auckland property market
• Financial stability concerns not sole driver of rates
• Won't hesitate to adjust interest rates if needed
• Loan-to-value ratios have been very successful
• LVR’s have reduced risk in banking sector
• Ability of any central bank with limited reserves to modify exchange rate is always going to be limited
• Future interest rate decisions will be driven by data
• The central bank can't fix the housing market
• Would like to see house price inflation slow significantly
NZD is higher across the board in response.

Here’s the link to the full RBNZ Monetary Policy Statement:

http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Monetary%20policy%20statements/2016/mpsjun16.pdf

Current indicative levels are:

NZD-USD 0.7120 / 0.7145
NZD-AUD 0.9500 / 0.9525
NZD-EUR 0.6240 / 0.6265
NZD-GBP 0.4900 / 0.4925
NZD-JPY 76.05 / 76.30

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