BNZ Weekly Overview - Sept 13 2007

Welcome to the September 13 edition of the BNZ Weekly Overview.

This week we are running our monthly survey (delayed due to long overdue tramping requirements) so if time permits please click on the link below and let us know whether you think things will get better or worse in the coming year and how things are currently looking in your industry.

http://www.closer.co.nz/bnzeconomist.asp

The liquidity crisis is continuing overseas and this has placed fresh upward pressure on New Zealand short term wholesale interest rates. But medium-term interest rates relevant to fixed rate borrowing costs have declined in response to a jump in expectations of easing monetary policy in the United States most probably on September 18. The New Zealand dollar has continued its roller coaster ride and we warn that further very high volatility beckons in coming weeks and possibly months. The Reserve Bank left the cash rate unchanged at 8.25% as we all expected this morning and noted uncertainty created by the way in which worries about finance companies, slowing growth overseas, and local interest rates slowing the housing market are being offset by a continuing commodity price boom and a sharp fall in the Kiwi dollar. NZ growth prospects remain reasonable the next two to three years but watch the rebalancing between domestic growth toward export growth.

(See attached file: WOSept13.pdf)

ENDS

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