Breaking: NZ Government mulls adding house prices as a factor in RBNZ's remit, NZD/USD nears 0.70

FXStreet Team FXStreet

New Zealand’s (NZ) Finance Minister Grant Robertson said Tuesday, the government is seeking advice on whether to include stability in house prices as a factor in the Reserve Bank of New Zealand’s (RBNZ) remit while formulating the monetary policy.

Additional takeaways

Have written to RBNZ governor Orr seeking advice on housing market.

Expect to receive advice from RBNZ by end of the year.

Not proposing any changes to RBNZ's mandate or independence.

Govt reviewing housing settings.

This comes as interest rates are at record lows while property investors and first-home buyers competing for limited housing stock in New Zealand, which has led house prices to surge by 20% on the year despite the pandemic.

Market reaction

NZD/USD jolted higher nearly 50-pips on the above comments, hitting the highest levels since June 2018 at 0.6982.

The spot gains 0.70% on the day, looking to regain the 0.70 barrier.

NZD/USD 15-minutes chart

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