Reserve Bank Governor Graeme Wheeler today announced that he will not be seeking a second term as Governor when his current term ends on 26 September this year. Mr Wheeler said: “It has been a great privilege to serve in this role, and in the remaining eight months I will remain fully focused on the economic challenges and opportunities facing the New Zealand economy. It was my intention, when I was appointed, to serve one term, and then to take on governance roles.” Mr Wheeler was previously employed at the World Bank from 1997 until 2010, where he was Managing…

The Reserve Bank has released a Bulletin article examining the core macro-economic model it uses to support the monetary policy decision making process. The New Zealand Structural Inflation Model (NZSIM) provides the central organising framework for the Reserve Bank’s forecasting and economic analysis. It is a structural model that provides a platform for evaluating the growth and inflation effects of various economic scenarios, including potential policy responses. The Bulletin article provides a brief review of the Bank’s recent forecasting models, the philosophy underpinning the design of NZSIM and explains how the model is used in the Reserve Bank’s forecasting process.…

The New Zealand Bankers’ Association announced today that the Industrial and Commercial Bank of China (New Zealand) Ltd has joined the association, bringing the total number of member banks to 16. New Zealand Bankers’ Association chief executive Karen Scott-Howman says: “We are delighted to welcome ICBC to the Bankers’ Association. China is one of New Zealand’s top trading partners. Having Chinese banks here helps take that important relationship to another level. “ICBC’s participation in the New Zealand banking industry further enhances competition and diversity in the sector”, adds Scott-Howman. Industrial and Commercial Bank of China (New Zealand) chief executive Qian…

ANZ today announced an agreement to sell UDC Finance, the asset finance business of its wholly owned subsidiary ANZ Bank New Zealand, to HNA Group, a global company focused on tourism, logistics and financial services. The sale reflects a continued focus by ANZ on simplifying its business and capital efficiency. ANZ New Zealand CEO David Hisco said: "The sale of UDC is consistent with our strategy to simplify the bank and is a good outcome for customers and staff. HNA Group is one of the world's largest asset finance and leasing companies, and it intends to preserve UDC's operations including…

The factory to the world has a new export: inflation. And it’s shipping faster than many thought possible just a few months ago. China’s weakening yuan, stimulus designed to ensure robust growth ahead of a crucial Communist Party Congress next year, and rebounding commodity prices are pushing up factory prices. Having turned positive in September for the first time in more than four years, producer prices rose 1.2 percent in October from a year earlier. That will almost double to 2.3 percent in November, according to analysts surveyed ahead of data due Friday. The pace is seen quickening even more…

The prospects look promising for New Zealand’s economic expansion to continue in the face of considerable international uncertainties, Reserve Bank Governor Graeme Wheeler said today. Speaking to the Development West Coast Conference in Greymouth, Mr Wheeler said that in many respects the economy is performing well. “Relative to the trends over the past two decades, New Zealand is experiencing stronger economic growth, lower inflation, and a lower unemployment rate – even with record levels of labour force participation. The Achilles heel of many New Zealand expansions – a large current account deficit – has not eventuated. “However, not everything is…

The Reserve Bank is taking account of changing household saving and spending behaviours in its inflation forecasts, Deputy Governor Geoff Bascand said in a speech to the Australia National University in Canberra this evening. Mr Bascand said that Australasian patterns of saving and spending are proving different from other advanced economies. Internationally, demand dynamics have changed since the global financial crisis (GFC), challenging inflation modelling and, in some cases, inflation-targeting frameworks. Some economists suggest that we are now in an era of “secular stagnation”, with persistent low demand due to higher saving and a reduced tendency to invest, driving down…