The Reserve Bank of New Zealand (RBNZ) has been among the world’s most aggressive central banks with respect to hiking interest rates. Its aggressive rate hikes have clearly scared the life out of mortgage borrowers causing them to become far more risk averse. In the process, the stability of New Zealand’s financial system is improving, while the heat is also being taken out of demand-side inflation. Given around 50% of New Zealand’s mortgage book will this year reset from ultra-cheap pandemic fixed rate mortgages to rates that are at least double current levels, there is further tightening already built-in. Thus, the RBNZ should be nearing the end of its rate hiking cycle.

Source: Stuff February 20, 2023 21:51 UTC