RBNZ makes NZ$906 million net profit
(12 October 2009 – New Zealand) The Reserve Bank of New Zealand's (RBNZ) annual net profit rose a significant 70 percent to NZ$906 million (A$732 million) from NZ$535m a year earlier.
The annual report for the year to the end of June indicated that net profit increased largely due to net foreign exchange gains of NZ$370 million, an increase of $145 million from the previous year.
RBNZ governor, Alan Bollard, said that the strong financial result reflected abnormally large changes in market conditions.
The annual report said overall returns from foreign reserves had been relatively strong in the latest year.
This was because the weaker New Zealand dollar increased the NZ dollar value of the RBNZ's foreign currency investments. While the value of the NZ dollar liabilities funding those assets remained unchanged.
The annual report also noted that New Zealand had escaped major damage in the worst global financial crisis in decades, but imbalances and vulnerabilities were also highlighted.
Allan Bollard, Reserve Bank Governor said that prior to the crisis, households had been consuming beyond their incomes, borrowing heavily offshore through their banks.
In the past two years there has been a substantial correction in household savings and the external payments imbalance, Mr Bollard added.
However, further improvements will be required to stop New Zealand’s international debt position from mounting further, Mr Bollard concluded.
RBNZ governor, Alan Bollard, said that the strong financial result reflected abnormally large changes in market conditions.
The annual report said overall returns from foreign reserves had been relatively strong in the latest year.
This was because the weaker New Zealand dollar increased the NZ dollar value of the RBNZ's foreign currency investments. While the value of the NZ dollar liabilities funding those assets remained unchanged.
The annual report also noted that New Zealand had escaped major damage in the worst global financial crisis in decades, but imbalances and vulnerabilities were also highlighted.
Allan Bollard, Reserve Bank Governor said that prior to the crisis, households had been consuming beyond their incomes, borrowing heavily offshore through their banks.
In the past two years there has been a substantial correction in household savings and the external payments imbalance, Mr Bollard added.
However, further improvements will be required to stop New Zealand’s international debt position from mounting further, Mr Bollard concluded.
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