Reserve Bank of New Zealand to consult on loosening (macroprudential) policy

<p>Reserve Bank of New Zealand consultation on DTI and LVR settings, will close on March 12. </p><p>In summary, Headlines via Reuters:</p><ul><li>
Launched consultation on activating debt to income (DTI) restrictions
and loosening loan to value ratios (LVRs) for residential lending</li><li>Propose to initially
setting DTI policy to allow banks to lend 20% of residential loans to
owner-occupiers with DTI greater than 6</li><li>Proposing easing the
lvr settings at the same time as activating DTIs</li><li>Propose initially
setting the DTI policy to allow banks to lend 20% of residential
loans to investors with DTI greater than 7</li><li>Propose easing LVRs
to allow 20% of owner-occupier lending to borrowers with LVR greater
than 80%</li><li>Propose easing LVRs
to allow 5% of investor lending to borrowers with an LVR greater than
70%</li></ul><p>–</p><ul><li>Deputy Governor Christian Hawkesby says the financial stability risks of ‘boom and bust’ credit cycles are significant, so it’s important to ensure we have appropriate policies in place to manage them. </li></ul><p>–</p><p>The full thing can be found from the Bank's website, here:</p><ul><li><a href="https://www.rbnz.govt.nz/hub/news/2024/consultation-on-dti-and-lvr-settings" target="_blank" rel="nofollow">Consultation on DTI and LVR settings</a></li></ul><p>NZD/USD little changed. This is not a change in monetary policy settings. The Reserve Bank of New Zealand was one of the first DM central banks to begin its rate hike cycle and so far have held rates at their peak:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.