Dawn Chorus for Thursday, January 25

Bank economists are confident theRBNZ’s proposals will not hurt demand for housing overall, and are likely to add support for inflation in the second half of the year. Photo: Lynn Grieveson / The Kākā

TL;DR: The Reserve Bank’s plan to loosen Loan to Value Ratio (LVR) restrictions at the same time as introducing Debt To Income (DTI) restrictions is expected to add demand pressure to house prices, just as the Reserve Bank is expected to start cutting interest rates.

Elsewhere in the news in Aotearoa-NZ’s political economy and beyond at 6 am:

• The Banking Ombudsman sent a secret communique to banks 10 months ago warning them to take action to stop term deposit scams, but an anti-scam campaigner says the ‘explosive note’ shows banks ignored the warnings and allowed millions of dollars in scams, Rob Stock reports for The Post-$$$ this morning.

• Waipukurau was plunged into level four water restrictions yesterday and residents may have to start boiling water after a massive leak drained storage levels down to 25% at a rate of 500 cubic metres a minute. The mayor of the central Hawkes Bay town of 4,000 said the leak was partly due to a lack of investment and the council was seeking funds from the Government, as well as long term clarity on new funding sources and tools for councils. RNZ

• Donald Trump won his second state primary contest for the Republican nomination for President overnight, but by less than he wanted and now will be now forced to delay and divert direct attacks on Joe Biden. Reuters

• Tuvalu is expected to follow Nauru in flipping its diplomatic allegiance from Taiwan to China in another blow for American and Australian hopes of pushing back against China in the Pacific, Kirsty Needham reported for Reuters overnight.

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LVR loosening seen adding to boost from lower rates