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Lehman collapse could hit NZ interest rates

16/09/2008 5:48:03

The collapse of a major US investment bank could have an impact on interest rates here.

Lehman Brothers is filing for bankruptcy protection after Barclays Bank of America abandoned talks to buy the firm.

BNZ chief economist Tony Alexander says the main implication in New Zealand will be that interest rates will not fall as rapidly as they otherwise might have, due to an increase in the cost of borrowing. But he says at some point when the global crisis improves, the cost of borrowing offshore will go down again.

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