28 Jan 2013

NZ banks now borrowing more cheaply

1:22 pm on 28 January 2013

Global funding costs have dropped making it cheaper for the country's banks to borrow money from overseas.

Harbour Asset Management's head of fixed interest, Christian Hawkesby, says funding costs for some of Europe's most troubled nations has fallen since the European Central Bank pledged to do whatever it took to save the euro, including making unlimited purchases of the bonds of countries like Spain and Italy.

Mr Hawkesby says at the height of the euro crisis in the middle of last year, Italy and Spain's borrowing costs hit record highs, but have since eased back to more normal levels.

He says that means New Zealand's banks can borrow more cheaply, and pass on to its customers.