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UPDATE 1-Reserve Bank of NZ sees global uncertainty, housing as risks
June 27, 2017 / 9:34 PM / 3 months ago

UPDATE 1-Reserve Bank of NZ sees global uncertainty, housing as risks

(Adds RBNZ quotes, context throughout)

WELLINGTON, June 28 (Reuters) - New Zealand’s central bank saw the country’s economic growth outlook as positive, but international uncertainties remained and the strong housing market was still a risk, it said in a statement to the government.

“The outlook for New Zealand’s economic growth remains positive, albeit with considerable uncertainty remaining, especially internationally,” Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler said in a copy of the statement published on the bank’s website on Wednesday.

The statement sets the bank’s priorities for the next three years and was signed by the governor on June 16.

Just over a week later, on June 23, the RBNZ had played down the recent rise in the New Zealand dollar and shrugged off weaker economic growth at the start of the year, as it kept interest rates steady at record lows for a fourth consecutive rate review.

In the statement of intent the bank pointed out that on a trade-weighted basis the New Zealand currency had fallen since the start of the year.

“If sustained, will help to rebalance growth towards the tradables sector,” the RBNZ said.

The bank saw the hot housing market as the top domestic risk, warning that recent moderations in house price growth could be temporary.

“Mortgage interest rates remain low and while building activity has continued to increase, the rate of house building is insufficient to accommodate rapid population growth and address existing housing shortages,” Wheeler said.

Reporting by Charlotte Greenfield and Wayne Cole

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