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6 Comments
The RBNZ did not close the FLP because of a prior commitment as to what the rules would be.
But the FLP funding will become more expensive as the OCR rises, and that includes the interest on existing FLP loans.
The banks taking out these loans were doing so because they figure it is cheaper than the wholesale rates they would otherwise need to pay.
If the RBNZ increases the OCR by 50 point rise in April and telegraphs a likely further 50c rise in May, then I will be comfortable with what they are doing.
Having had their foot far too hard on the accelerator in 2021 (a very bad error which was obvious to at least some of us at the time), they have to be mindful of braking too hard in 2022. Part of the complexity arises from lags in the system.
KeithW
What do the people of NZ pay to borrow on the 10 year treasury -2.8%
We are giving this money to foreign banks for 1%
They lend it back to us at between 4 and 7%
Profits go offshore....
This is the very essence of corruption. Why are they doing something so blatantly stupid. Because they reap a reward somewhere.
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