CORRECTED-RBNZ says will impose home loan lending limit from October
(Corrects NZ dollar level to $0.7985 from $0.7885 in last paragraph)
WELLINGTON Aug 20 (Reuters) - New Zealand's central bank will impose limits on high-value, low-deposit mortgage lending from the start of October, the central bank governor said on Tuesday, ruling out any likelihood of a rise in its benchmark rate for fear of boosting the New Zealand dollar.
Graeme Wheeler said the Reserve Bank of New Zealand (RBNZ) would limit the amount of high loan-to-value ratio lending (LVR) that banks would be able to do at no more than 10 percent of total lending.
"The Reserve Bank considers that LVR speed limits will be more effective than other macro-prudential tools in constraining private sector credit growth in the housing sector, and dampening housing demand," he said in a speech.
He said the bank did not want to raise its benchmark cash rate, currently at a record low 2.5 percent, to tackle the housing market because it might fuel an already elevated New Zealand dollar.
The Kiwi dollar retreated on the news to $0.7985, from $0.8064 earlier, pulling away from a two-month peak of $0.8165 touched on Monday.
(Reporting by Gyles Beckford; Editing by Eric Meijer and Paul Tait)
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