RBNZ will proceed with proposal to tighten mortgage lending

Reuters reported that New Zealand's central bank on Thursday said it would proceed with its proposal to tighten mortgage lending in a bid to control an inflated housing market.

Key notes

''The Reserve Bank of New Zealand (RBNZ) from Nov. 1 will restrict the amount of lending banks can do above a loan-to-value ratio (LVR) of 80% to 10% of all new loans to owner-occupiers, down from 20%, Deputy Governor Geoff Bascand said.

"Restricting high-risk lending will help prevent (housing market) problems getting worse," Bascand said in a statement.''

Market implications

There has been no immediate reaction to the headline and NZD/USD oscillates just below the close of the prior day and a touch below 0.7000 at 0.6994.