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Comparing OCR and floating rates no longer relevant
Tuesday 10th of May 2016
The difference between floating home loan rates and the Official Cash Rate is no longer a good measure of margins, ASB chief economist Nick Tuffley says.
He says the OCR doesn't represent the cost of funds.
While there was a clear relationship previously things changed after the Global Financial Crisis.
"The OCR does not reflect any credit risk premium," he told advise...
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