RBNZ's Wheeler: NZD rate unjustified and unsustainable

FXStreet (Bali) - Reserve Bank of New Zealand governor Wheeler, speaking about Reflections on 25 years of Inflation Targeting, at the conference being sponsored by the Reserve Bank of New Zealand and the International Journal of Central Banking, in Wellington, said that NZD real effective exchange rate remains unjustified and unsustainable, although he added that there is little the RBNZ can do to sustainably alleviate an overvalued real exchange rate.

Key headlines

Says inflation targeting remains appropriate

Inflation targeting has delivered stable prices

Real effective exchange rate remains unjustified and unsustainable

RBNZ is a flexible inflation targetter

Loan limits (he is referring to the macroprudential tools) amount to a 25-50bp of rate increases

Loan limits will be eased when housing pressure eases

Little the RBNZ can do to sustainably alleviate an overvalued real exchange rate