NZ RBNZ Financial Stability Report eyed - Westpac

FXStreet (Bali) - The RBNZ Financial Stability Report on Nov 12, due at 20 GMT, is the main event for the Kiwi this week, an opportunity for the NZ CB to potentially review its ‘speed limit’ on high loan-to-value ratio (LVR) mortgage lending, notes Westpac.

Key Quotes

"The RBNZ has been hinting for some time that it would review its ‘speed limit’ on high loan-to-value ratio (LVR) mortgage lending towards the end of this year. Back in May the RBNZ said: “Before removing the LVRs, we will want to be confident that the housing market is responding to interest rate increases, and that immigration pressures are not causing a resurgence of house price pressures.” We think those conditions have been comfortably met."

"The remaining questions are: (1) whether the RBNZ will give a firm or conditional timetable for removal, and (2) whether it will be loosened initially or removed all at once. We’re reluctant to guess at a date, but on the latter we suggest it would be prudent to at least retain some non-binding limit, to discourage a return to the previous habits that prompted the restriction in the first place."