Sunday, May 9, 2021
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HomePoliticalRBNZ Governor Outlines Housing Direction

RBNZ Governor Outlines Housing Direction


In remarks for a Monetary Policy Statement
presentation to the Canterbury Employers’ Chamber of
Commerce today, Reserve Bank Governor Adrian Orr has
elaborated on the direction received from the Minister of
Finance, to
have regard to house price sustainability
when making
its financial stability policy decisions.

“The
direction makes specific how our financial stability
policies and actions can assist the Government’s housing
policy objectives, in line with our financial stability
objective of promoting a sound and efficient financial
system.”

“We will be considering our financial
stability policy settings via our prudential tools – like
loan-to-value ratios, bank stress testing, and capital
requirements against particular types of mortgage lending.
This is done with a view to moderating housing demand,
particularly from investors, to best ensure house price
sustainability,” Mr Orr said.

“Importantly, our
Monetary Policy Committee remit targets remain unchanged. We
remain only focussed on maintaining low and stable consumer
price inflation and contributing to maximum sustainable
employment, as recently outlined in our Monetary Policy
Statement.”

“The Committee will continue to be
very transparent in explaining the impact of all of our
monetary policy decisions on the housing market, as we are
for many other variables.”

“We remain committed to
our current stimulatory monetary settings until we are
confident that consumer price inflation will be sustained at
the 2 percent per annum target midpoint, and that employment
is at or above its maximum sustainable level. Meeting these
requirements will necessitate considerable time and
patience.”

More
information:

The Governor’s presentation today
is part of a series of outreach events to explain the key
messages in the February Monetary Policy Statement,
released on Wednesday.

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