INDEPENDENT NEWS

RBNZ Deputy Governor Bascand raises possibility of rate cut

Published: Fri 22 Feb 2019 04:28 PM
The Reserve Bank of New Zealand Deputy Governor Geoff Bascand has spoken with reporters on the RBNZ’s proposals to increase bank capital requirements.
His key points were:
•Proposals could raise borrowing costs and ultimately lead to tighter monetary conditions
•This may require a cut to the OCR (official cash rate)
•“If we were worried…and thinking we may have an economy that’s undershooting inflation or undershooting maximum sustainable employment, we’d offset it with an OCR change”
The RBNZ is proposing that banks be require to raise high-quality Tier-1 capital to 16% of overall risk-weighed assets – almost double the current regulatory requirement.
Banks have said the consequences of the proposals could lead to slower credit growth, higher borrowing costs and weaker economic growth.
The OCR currently stands at 1.75%
NZD is lower across the board in response.
Current indicative levels are:
NZD-USD 0.6765 / 0.6790
NZD-AUD 0.9540 / 0.9565
NZD-EUR 0.5965 / 0.5990
NZD-GBP 0.5185 / 0.5210
NZD-JPY 74.90 / 75.15

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media