BNZ moved against a general trend towards higher rates part-way through January by trimming its flagship Unbeatable two year rate to 7.89%. BNZ said this was a special offer and as expected it has now increased it, to 8.17%. But has also raised its standard three and five year rates to 8.20% and 7.85% respectively and its Global Plus five-year rate to 8.00%. It is now pushing seven-year fixed rates of 7.77%.
ASB and other lenders within its group reduced some rates at the end of January but Ian Park, head of retail banking said shortly after the move that margins had tightened since the re-pricing.
Significantly, perhaps, there has been no rush to follow ASB down.
Park said this week that rates in the wholesale markets had been stable over recent days but the bank would be looking at the picture again later this week.
Employment statistics due out on Thursday would give a further clue to the direction of rates in New Zealand, he said.
Statistics on wage inflation released Monday, and on migration last week both pointed towards a further rise in the official rate when it is next reviewed on March 8.
Data from Statistics New Zealand showed that salaries and wages rose by 3.2% in the year to the December 2006, significantly higher than economists expected. Net migration, at 14,610 over the year to December, was higher than Reserve Bank projections, prompting ANZ to comment in its latest Economic Review that the RBNZ was likely to view the figure as an “ongoing upside risk to inflation”.
Tony Alexander, chief economist at BNZ, writing before his employer increased it two-year Unbeatable rate from 7.89 % said: “At the moment on a Thursday afternoon I would fix for two years at 7.89%. But if that special rate was not available I might be inclined to look at one of the longer-term fixed interest rates.”
