The low imported interest rates have necessitated a variety of economic policy responses across many countries – including the lowering of central bank policy rates to stem the inflow, introducing macroprudential tools aimed at curbing excess lending, and purchasing foreign assets to slow down upward pressure on domestic currency values.
At Te Pūtea Matua we have undertaken the first two of these responses so as to continue to meet our inflation and employment mandate, as well as mitigate the risks of excessive debt/lending on broader financial stability (e.g., the introduction and use of our Loan-to-Value Ratios).