RBNZ governor Wheeler speech: “Explaining the role of macro-prudential policy.”


  • Says from October 1 banks will have home lending restrictions
  • Low deposit loans to be limited to 10% of new mortgages
  • Says limit should slow house price growth
  • Says restrictions will support monetary policy
  • Says NZ economic recovery to become more broad based
  • Says higher rates may be needed next year to tackle inflation but not needed at present
  • Says any OCR increases in the near term would risk raising the NZD sharply

I did a bit of preview here.

While much of the speech was about containing the housing market, note the comments related to interest rates and the NZD. Most obviously, Wheeler once again kicked the NZD, as he often does when making speeches. the RBNZ and the NZ government want a lower currency (they are an export-geared economy). Then, in talking about measures to control house price rises instead of using an interest rate hie he makes the NZd less attractive than otherwise (higher rates would mean a more attractive NZD for yield chasers).