RBNZ’s Orr: Low interest rates ensures NZD exchange rate remains competitive

“Low-interest rates ensured the New Zealand dollar exchange rate remains competitive,” the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said in a scheduled speech following the release of the Financial Stability Report early Wednesday.

Additional quotes

“Committed to meet our remit.”

“Intend to work with govt on long term goals of housing affordability.”

“Already taking housing prices into account in monetary policy decisions.”

“No concerns about the independence of the central bank.”

“Not surprised by a letter from govt on housing prices.”

“Remit remains the same, nothing has changed.”

“Have to consider toolkit.”

“The RBNZ would reimpose loan-to-value restrictions on lenders that it eased in May.”

“The RBNZ would like to add debt-to-income restrictions to its macroprudential tool kit, a move that requires government approval.”

On Tuesday, Orr said that “house prices are an important channel that affects inflation,” while commenting on the monetary policy.

His comments come after 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.

NZD/USD remains unfazed on Orr

NZD/USD keeps its range near-daily highs of 0.6982 on the above comments. The downside pressure on the US dollar caps the corrective declines in the kiwi from multi-month tops.


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