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Reserve Bank of New Zealand's Spencer says house loan rules temporary

Published 03/27/2014, 02:58 AM
Updated 03/27/2014, 03:01 AM

Investing.com - The Reserve Bank of New Zealand said inflation remains the focus of monetary policy with housing an important variable that required macro prudential steps, but only as a temporary measure, Deputy Governor Grant Spencer said in prepared remarks Thursday.

Spencer made the comments in Hong Kong on the topic "Coordination of Monetary Policy and Macro-prudential Policy."

"The monetary policy tightening cycle that is now underway is motivated by the need to ensure that CPI inflation remains in the vicinity of 2% over the medium term," Spencer said.

"However, while not motivated by the financial stability objective, the monetary policy tightening is expected to help in dampening further house price inflation."

Earlier in March the RBNZ hiked its official cash rate by 25 basis points to 2.75% in the face of rapid economic growth and pressures in the country's housing market that led the central bank to issue restrictive loan-to-valuation rules last year to ease price pressures.

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