Source: Reserve Bank of New Zealand
16 June 2021 â The Reserve Bank â Te PÅ«tea Matua and the Minister of Finance have agreed to update their shared Memorandum of Understanding (MoU) on macro-prudential policy and add debt serviceability restrictions to the list of potential tools available.
In February, the Minister of Finance issued a formal direction to the Reserve Bank (under section 68B of the Reserve Bank Act) for us to have regard to house price sustainability when making financial stability decisions. This is separate from the Monetary Policy Committee’s monetary policy remit.
The Minister also requested more information and analysis on debt-to-income ratios and interest-only mortgages. The Bank provided this advice to the Minister last month, and we are today releasing it publically.