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New Zealand - New LVR rules raise the chance of rates going below 2.0%

Today’s announcement by the Reserve Bank of New Zealand that it intends to tighten existing loan-to-value restrictions will not only go some way to addressing the risks to financial stability posed by the booming housing market, but will also allow the Bank to tackle the issue of low inflation by cutting interest rates further, in our view to at least 1.75%.

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