How do the banks win ?
Lower interest rates usually means tighter margins for banks.
Printable View
Well the banks dropped lending rates for one & two year as the curve dropped in anticipation of the RBNZ lowering rates.
Banks will make much better margins of a higher interest rate environment than a low one, so overall the RBNZ lowering rates is not helping the banks at all, quite the opposite.
You may be right daytr ....seems like everybody is reading the same papers
I still to be convinced though but the trick is to prosper if one can prosper from the commentators myopic view of the current state of the economy. Thinking about that
http://www.interest.co.nz/opinion/75...aster-had-been
Well its been my view for a while & in fact I said when the RBNZ raised rates last year I said it was a mistake, but they were between a rock & a hard place due to the Auckland property market & immigration. Well they have targeted the Auckland property market recently, not sure what impact it will have, but some & now they can have policy that is dictated by the whole country's position rather than just one out of control property market.
Good for this exporter sector worker.and the spine of NZ's economy ....sub 90c NZD/AUD fine by me ....the idea of higher rates has and will continue to be a pipedream..of the media and those that believe high NZD = great times !
Just because the flood of foreign money & people into the likes of the Auckland Property market shouldn't be the main driver of RBNZ policy
but of the immigration office ...having money shouldn't equal easy entry into NZ and it's property market....must be a stand down period IMHO maybe new builds only or rent first 5yrs to foreigners
rant over
Thanks for that Snaps. I wondered earlier if it was going to breach .91 and then saw it at .9039 and wondered what had happened. Still same on US cross so assumed it was Australian influenced. That is a double whammy. Not that I am complaining... topped up on Aussie stocks around time of the "parity" talks.
Nice rant though JB! ;-)
Snaps, obviously the economy is rooted and needs a decent boost. I see some bank commentators now touting cuts in July and September, all the way to 2.75%
Looks like NZD to fall even further. You hanging in there for the ride?
Next shock (noise) is GDP number out soon. Lower than expected they say making that bet even better.
That how you playing it?