RBNZ Financial Stability Report: financial systems remain sound, LVRs to remain unchanged

The Reserve Bank of New Zealand's (RBNZ) Financial Stability Report hit markets early on Wednesday, delivering the central bank's outlook on the New Zealand economy.

The RBNZ noted that the Kiwi's financial system remains 'sound', and that there is sufficient capital and liquidity buffers within the banking system, but the RBNZ noted that household mortgage debt remains high despite a lessened presence of financial risks. The RBNZ will also be leaving LVR restrictions unchanged, with the RBNZ's Governor Orr stating that housing price inflation is expected to remain somewhere between 2 and 3%, and a decision on LVRs is unlikely to be seen before the next Financial Stability Report.