HiFX Data Update - RBNZ Financial Stability Report Release

The RBNZ has just released its Financial Stability Report.

The key points in report are:

• Reserve Bank of NZ stability review says financial system remains sound

• The banking system holds sufficient capital and liquidity buffers, guided by our prudential regulatory requirements

• Household mortgage debt remains high

• Financial risk has lessened with both lending and house price growth slowing in the last 12 months

• Most dairy farms are currently cash-flow positive, but remain vulnerable to any possible downturn in dairy prices and agriculture shocks

• The banking sector is broadly efficient, although some lending allocation remains a vulnerability

• The insurance sector as a whole also remains sound, profitable and adequately capitalised

• To leave LVR (loan-to-value) restrictions unchanged

• Key vulnerabilities include housing, dairy sector indebtedness, banking system exposure to international risks; remained broadly stable over past 6 months

The NZD is little changed in immediate response.

Current indicative levels are:

NZD-USD 0.6880 / 0.6905
NZD-AUD 0.9175 / 0.9200
NZD-EUR 0.5965 / 0.5990
NZD-GBP 0.5185 / 0.5210
NZD-JPY 74.80 / 75.05

Please call for further information or pricing.

Below is the link to the full RBNZ statement and report:

https://www.rbnz.govt.nz/financial-stability/financial-stability-report/fsr-may-2018

RBNZ Governor Orr testifies about the Financial Stability Report before Parliament Select Committee at1:10pm today. Expect more comments on the global risks (Italy/EU/China) and the impact of Mycoplasmas bovis disease on the NZ economy.

Please call for further information or pricing.

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