Next Entries »

Interest Rates

Wednesday, March 5th, 2008 at 4:01 pm

intratemar08.JPG

I’ve noticed in recent weeks that mortgage rates have been going up despite the official cash rate staying constant for the last six months. So I checked out the Reserve Bank data.

So on the graph you can see the OCR and the average floating first mortgage rate. And sure enough it has been starting to creep up.

The gap between the mortgage rate and the OCR in Feb 2008 was 2.40%. At times it has been as low as 2.00% and the average for the last four years is around 2.25%.

Now I’m not sure what this means, but could it be an expectation that the OCR may go up again? Or are the banks just increasing their margins?

Tags:

Posted in New Zealand | 48 Comments »

A new high for the dollar

Tuesday, February 26th, 2008 at 9:21 pm

excratefeb08.JPG

The NZ$ hit a new high against the US$ dollar today. The above graph shows monthly averages except for Feb 08 which is yesterday’s peak.

NBR and NZPA report that we hit 81.5c and some traders are picking 90c.  Earlier forecasts were for a peak of 83c to 95c though.

Also of interest is  Westpac is picking the Reserve Bank to increase interest rates twice this year. Ouch. But an interesting call from the Canterbury Manufacturers Association for a variable rate compulsory superannuation saving scheme. So when inflation starts to increase, you increase the compulsory deduction rather than put interest rates up.

It’s a nice idea but will only affect personal consumption but business activity, so I am unsure whether it would be as effective as the cash rate.  But just like Don Brash’s suggested variable petrol tax – it would be good to model.

Tags: ,

Posted in New Zealand | 18 Comments »

Next Entries »