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New Zealand's financial system adjusting to higher interest rates: central bank

WELLINGTON
2023-11-01 09:51

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WELLINGTON, Nov. 1 (Xinhua) -- New Zealand's financial system remains strong as it adjusts to a higher interest rate environment, a senior central bank official said on Wednesday.

The full impact of previous interest rate increases globally is still to be seen. A weakening in global demand has contributed to lower key commodity prices for New Zealand, and developments in the Middle East has been monitored closely, deputy governor of the Reserve Bank of New Zealand Christian Hawkesby said in a Financial Stability Report.

"New Zealand households continue to face higher mortgage repayments. So far, the vast majority of borrowers have been able to manage these increases, but we know some people are struggling and falling behind," Hawkesby said.

Businesses continued to service debt, although dairy and commercial property sectors were facing challenges, partly due to higher debt servicing costs and other factors, he said.

The deputy governor said New Zealand's financial sector is strong and well placed to handle both the current adjustment to higher interest rates and more severe economic scenarios.
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