Reserve Bank of New Zealand governor Wheeler

  • Says in the absence of major unanticipated shocks, prospects look promising for continued robust economic growth in NZ over the next two years
  • Says the greatest risk we face at this stage relates to the inflated global asset prices and the continuing build up in global debt
  • LVRs are not expected to be a permanent measure, but their removal would require a degree of confidence that financial stability risks won't deteriorate again
  • There's a risk of a housing market resurgence if LVRs were removed at this time
  • Long-term inflation expectations remain well anchored at the target mid-point of 2 percent
  • Says would not use DTIs while housing market continues to moderate
  • Says a lower New Zealand dollar is needed to increase tradables inflation and help deliver more balanced growth
  • Further surge in house prices can't be ruled out as mortgage rates are low, net migration flows strong

Much of Wheeler's reported comments on macro-prudential policy, but he slipped in a kcik at the currency too

NZD responding, trading off 20-odd points