RBNZ to keep a tight grip on LVR rules

Current subdued lending growth needs to be sustained before rules can be eased, according to RBNZ's Financial Stability Report

RBNZ to keep a tight grip on LVR rules

The Reserve Bank of New Zealand (RBNZ) is not likely to ease its mortgage lending restrictions for another six months, it has been revealed.

At a media conference on RBNZ’s financial stability report, Governor Adrian Orr said the current subdued lending growth needs to be further sustained before the central bank gain sufficient confidence to again ease the loan-to-value (LVR) ratio restrictions.

“New Zealand’s financial system remains sound,” Orr said. “The banking system holds sufficient capital and liquidity buffers, guided by our prudential regulatory requirements.

“These buffers reduce New Zealand banks’ exposure to adverse shocks,” he added.

However, the bank says, risks remain from household and dairy debt and the impact of rising international interest rates.

 

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