New Zealand’s financial system is resilient and continues to function effectively, but risks to the financial stability outlook have increased further in the past six months, Reserve Bank Governor, Graeme Wheeler, said today when releasing the Bank’s May Financial Stability Report.
“Although New Zealand’s economic growth remains solid, the outlook for the global economy has deteriorated. Despite highly accommodative monetary policies and low oil prices, growth is slowing in a number of trading partner economies.
“Dairy prices remain low with global dairy supply continuing to increase. Many farmers now face a third season of negative cash flow with heavy demand for working capital.
“Imbalances in the housing market are increasing with house price inflation lifting again in Auckland, after cooling in late 2015 and early 2016 following new restrictions in investor loan-to-value ratios and government measures introduced in October.
“House prices have also begun increasing strongly in a number of regions across New Zealand, although house prices outside Auckland are generally much lower relative to incomes.
“The Bank remains concerned that a future sharp slowdown could challenge financial stability given the large exposure of the banking system to the Auckland housing market. Further efforts to reduce the imbalance between housing demand and supply in Auckland remain essential. This includes measures such as decreasing impediments to densification and greenfield development and addressing infrastructure and other constraints to increased housing supply.”
Deputy Governor, Grant Spencer, said: “In the banking system capital and liquidity buffers are strong and profitability is high.
“However, the system faces challenges. Internationally, credit spreads have widened, placing upward pressure on the cost of funds for New Zealand banks.
“The level of problem loans in the dairy sector is expected to increase significantly over the coming year, although we expect that dairy losses will be absorbed mainly through reduced earnings.
“While the moderation in house price inflation has been transitory, the LVR restrictions have substantially reduced the proportion of risky housing loans on bank balance sheets. This is providing an ongoing improvement to financial system resilience.
“The Reserve Bank is closely monitoring developments to assess whether further financial policy measures would be appropriate.
“The Reserve Bank continues to make progress on key regulatory initiatives. Consultation papers on proposed changes to the outsourcing policy for banks and on changes to bank disclosure requirements will soon be released. A consultation paper has also recently been released on crisis management powers for financial market infrastructures.”
IMF to Review Nigeria’s Growth Forecast Amid Destruction of Businesses, Properties
IMF Says it May Review Nigeria’s Growth Amid Recent Development in the Country
Following the destruction of businesses and properties that trailed the #EndSARS protest, the International Monetary Fund (IMF) has said it may review the nation’s growth forecast in view of the new development in the country.
Abebe Selassie, the Director, African Department, International Monetary Fund, made the statement while responding to questions during a virtual IMF press conference on the economic outlook of Sub-Saharan Africa on Thursday.
According to him, the protest is difficult given that Lagos is a very important economic hub and contributes to the overall Nigeria activities.
Selassie said, “On the growth projections in Nigeria, I mean, these protests happened of course, after we had closed, after the period where the data we looked at in making the growth projections for this economic outlook.
“And much will depend really on how these protests evolve.
“Lagos of course, is a very important economic hub and contributes quite a bit of economic activity to overall Nigeria activities.
“So, if these persist and are showing significant effects on economic data, we will internalise them in due course.”
He further explained that the nation’s economy had been a difficult one in the last four years ever since oil prices plunged in 2015-16.
He said, “I think this is exactly why we have been on the record in Nigeria about how really critical it is to get all of the policy induced barriers out of the way to facilitate stronger economic growth.
“For the government to do more to raise revenues through the area of non-oil resources to be able to invest in health education which would, you know, allow people to be more successful at getting jobs but also improve the economy’s potential.
“So, I think that development agenda that Nigeria has, I think, has to be tackled with gusto and vigor so that the millions of jobs that the country needs can be created.”
Oil Marketers Lose Millions as Hoodlums Set Petrol Tankers on Fire
Oil Tankers Burnt by Hoodlums as Marketers Lose Millions to Protest
Oil marketers lost millions of Naira to repeated attacks by hoodlums exploiting the #EndSARS protest.
The Independent Petroleum Marketers Association of Nigeria on Thursday said hoodlums have been attacking their trucks since they hijacked the protest earlier in the week.
The association said three petrol laden trucks were burnt again on Thursday in Warri, Delta State.
This came as the Board of Trustees of the Oil and Solid Mineral Producing Area Landlords Association of Nigerian urged protesters across the country to sheathe their swords as the destruction of oil assets and others had become alarming.
Chief Chinedu Ukadike, the Public Relations Officer, IPMAN, who spoke in Abuja said three petrol tankers with petroleum products estimated at about N90 million were set on fire on Thursday.
He said, “The protesters are burning our petrol trucks as we speak right now in Warri. They are burning three trucks. The cost or value of the content in those trucks is about N90m.
“That is outside the worth of the trucks that are being burnt. This is why we asked our tanker drivers to park or temporarily halt the movement of products.”
Ukadike said the association decided to halt the movement of petroleum products on Wednesday to avert a further disaster that could arise attack of oil tankers by angry protesters.
“That advise on the temporary halt of tankers movement was vital, particularly for volatile locations where protesters are highly aggressive. So that is what is happening now in Warri, the petrol trucks of oil marketers are being burnt,” he stated on Thursday.
LCCI Says FG Loses N700bn to #EndSARS Protest in 12 Days
Nigeria Loses Over N700 Billion to #EndSARS Protest in 12 Days
The Federal Government lost over N700 billion to the #EndSARS protest in twelve days, according to the Lagos Chamber of Commerce and Industry (LCCI).
Mrs. Toki Mabogunje, the President, LCCI, disclosed this while reviewing the economic implications of the just ended #EndSARS protest.
Mabogunje, who appreciated the value of citizens engagement and the demand for accountability which the protest represents, lamented the negative effect on the nation’s economy.
She said, “These are in consonance with democratic norms. They also form vital ingredients for good governance.
“LCCI is however concerned about the negative impact that the protracted nature of the EndSars protests has on business activities across the country.
“Over the past twelve days, economic activities have been crippled in most parts of the country and has been particularly profound in the urban areas.
“The Nigerian economy has suffered an estimated seven hundred billion naira (N700 billion) loss in the past twelve days.”
She further said the protest has reawakened the need to reform the shortcomings in the nation’s political governance, however added that to protect livelihoods of Nigerians, including business community, the protesters need to move to next stage of civic engagement.
“This is necessary to reduce the massive disruptions, blockades and barricades around our major cities and interstate highways. These actions have been at great cost to the economy and the welfare of Nigerian citizens. It should be noted that our economy is still reeling from the shocks of the Covid 19 Pandemic and struggling to recover from its devastating effects,” she added.
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