Economist explains why the housing crisis has become progressively worse

Author
Newstalk ZB,
Publish Date
Wed, 25 Nov 2020, 11:45AM
Photo / File
Photo / File

Economist explains why the housing crisis has become progressively worse

Author
Newstalk ZB,
Publish Date
Wed, 25 Nov 2020, 11:45AM

Hopes the Reserve Bank remains independent from the Government, so it's effective.

Finance Minster Grant Robertson has written to the Reserve Bank, asking it to consider house prices more closely in its monetary policy remit.

Economist Shamubeel Eaqub told Kate Hawkesby the Reserve Bank is doing all it can with monetary policy.

He says Robertson's letter needed to be flexible, giving the bank a different way of dealing with the Government's request, while still being independent.

"The bank can't use interest rates how it would like, because we don't want it to raise interest rates in the middle of a pandemic - just because house prices are rising."

Reserve Bank Governor Adrian Orr will speak later this morning, following the release of the November 2020 Financial Stability Report.

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