NZ central bank says financial system vulnerabilities remain

By Reuters10 days ago

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WELLINGTON, May 5 (Reuters) - The Reserve Bank of New Zealand (RBNZ) said the country has come through the COVID-19 pandemic better than initially feared, but financial vulnerabilities remain and that more action may be needed to control an inflated housing market.

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Successful public health measures along with substantial monetary and fiscal policy support, helped to prevent many business failures and a larger rise in unemployment, Governor Adrian Orr said in the bank's Financial Stability Report (FSR).

But border restrictions, supply chain disruptions, and social distancing have reduced activity in affected sectors, and some businesses remain vulnerable, he added.

Orr said low interest rates have resulted in increased risk taking and higher asset prices, with the impact most visible in higher house prices.

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