|
本研究的目的是发展学生的笔记技巧，并清楚地了解利率对新西兰储蓄和投资市场的影响。本报告是在进行在线研究，由Rasheed Hussein先生进行演讲的准备，我的经济学导师在Aotearoa研究。
我们的第一个任务是进行在线或继发性研究在奥克兰市图书馆和选择的文章是非常重要的，对新西兰的利率，其作用和储蓄与投资市场之间的关系，然后总结文章和创建这个报告撰写相关笔记。
This report is task three(3) of the Academic Skills for Business Studies 469 collaborative assessed tutorial as requested by our tutor Miss Seema Singh on 12/12/14.
The purpose of this research is to develop students note taking skills and create a clear understanding of the impact of interest rates on the New Zealand savings and investment market. This report is prepared after conducting online research and a lecture conducted by Mr Rasheed Hussein, our economics tutor at Aotearoa Tertiary Institute on 13th November 2014 at 10.30 am- 12.30 pm.
Our 1st task was to conduct an online or a secondary research at the Auckland City libraries and choose articles that were important and related to the New Zealand’s interest rates and its role and the relationship between savings and investment markets, then summarise the articles and create notes relevant for this report writing.
Our second task was to apply the notes taking skills discussed in the ASB 469 class from the attended lecture by Mr Rasheed Hussein on the topic “The Impact of Interest rate on New Zealand savings and Investment Market”. The method of outlining was used to take notes from the lecture.
Interest rates play a major role in New Zealand’s savings and investment market. The role of Reserve Bank of New Zealand is to monitor and control the economy and accordingly outline the levels of interest rates that need to be put in place so that a balance could be maintained in the savings and spending market. Furthermore interest rate defines the level of people’s saving and the level of their spending as well. The high interest rates mean higher savings but a lower investment level, a lower interest rate means a higher investment and fewer saving.
Table of content
Executive Summary.................................................................................................1
Introduction ...........................................................................................................3
Findings .................................................................................................................3
The role of New Zealand Reserve Bank (NZRB) and Banks in New Zealand .............3
Interest rate ...........................................................................................................4
Economy .....................................................................................................4
Inflation ......................................................................................................4
International borrowings by New Zealand government ...............................5
Fiscal deficit of New Zealand’s Budget ........................................................5
Impact of interest rate on savings ..........................................................................6
Impact on Interest rates on investments ................................................................6
Conclusion .............................................................................................................6
References .............................................................................................................7
Introduction 简介
Savings is the money and the wealth that a household put in their banks deposit accounts for their future savings and in an effort to receive extra money that the bank pays on the deposited amount as interest rates. Investments are the same money that bank uses to facilitate their borrowers who need that money in a loan form to purchase something that they cannot afford to pay for. Thus, they pay have to pay extra money in the form of interest, on their borrowings to the bank.
Findings 调查结果
The findings from the in class lecture by Mr Rasheed Hussein on 13th November 2014 and the on-line secondary research conducted both revealed that interest rate has a very close relationship with both the savings and the investment. The rate of interest defines the savings level and the investment rate in the New Zealand economy. Therefore, it can be said that interest rates are the catalyst for the savings and the investment market in New Zealand. The rate of interest is the determinant for the level of savings and the level of investments in the market. If the interest rate is low then there is low level of savings by the households and if the interest rate is high then there is a high level of savings. But in case of investment rate in New Zealand, high interest rate determines high level of investment and low interest rate determines low level of investment.
The role of New Zealand Reserve Bank (NZRB) and Banks in New Zealand
Reserve Bank of New Zealand is an independent Bank operating in the New Zealand looking after all the banking corporation operating in New Zealand. It can be considered as the bank for the banks. They operate by taking Government’s submission and advice from the Finance Minister. It controls both the Interest rates and the Official Cash Rate (OCR) as It is responsible for the issuing of currency and destroying the outdated ones. They have knowledge of how much money is flowing in the New Zealand’s economy as the amount of money that comes into the country has to be declared and the amount of money that is going out of the country has to be also declared. It monitors New Zealand’s economy, employment rate, local and international investments in New Zealand. It also follows the events of overseas Major trading partners which have direct or indirect effect on the New Zealand economy for example, China, United States of America, India etc. A change in their economy will have an impact in the New Zealand’s economy as well as New Zealand’s trading sector is hindered by their its other trading partners where an decline in their trading abilities will result in their ability to trade with New Zealand. Hence there would be a decline in the New Zealand’s economy who depends on those trading with its major partners. Therefore reserve Bank of New Zealand main role in trade responsibility is to discuss, create and maintain New Zealand’s market entry for its locally produced goods and services to the other foreign countries. It develops a partnership arrangement in its trade talks by establishing open and an ongoing negotiations between New Zealand businesses and the foreign investors. This negotiation helps the New Zealand government and the concerned business to meet its defined demands and expectations of the local exporters. It also provides money to the Banks operating in New Zealand when they have issued lots of money to investors and are in short of funds (Hussein, R. 2014).
In 2008 Official Cash Rate was 2.5% when it was the lowest in the history of New Zealand but has increased to 6% in 2014 (Hussein, R. 2014).
Banks are the intermediaries between savings and the investments. Savers deposit spare money and wealth with the bank for save guarding and in return attain interest on it. And investors borrow money from the banks in order to invest or purchase something which they cannot afford to pay on their own therefore they seek bank’s help to finance them and in return pay interest rate on the loaned money plus the actual money borrowed. The banks give out loans to households and people and investments are made by entrepreneurs and business as well as foreign investors (Hussein, R., 2014).
Interest rate 利率
It is the cost of borrowing where the borrower has to pay extra money allocated to them depending on their loan and the rate of interest together with the actual amount borrowed. It is the rate set by the Reserve Bank of New Zealand which the banks operating in New Zealand have to pay to Reserve Bank and the borrowers pay to bank. The Banks operating in New Zealand also have to pay interest on savings banked with the banks by households and businesses. But the interest rate paid out on savings are at a lower rate than the borrowings that has to be paid to the bank. For example they have put up a 2% interest rate on savings and 6-7% on home loans, 22% on credit card accounts and car loans 13-14%.( Hussein, R. 2014) Reserve Bank has allocated different interest rates for different investments and loans as illustrated in the table below.
The interest rate on the different kinds of loans depends on the risk and the ability of it being recovered. As per above table the bank has put up a 13-14% interest rate on the car loans because it is a depreciable item and the value will depreciate over the years. Therefore if the borrower is not able to pay the car loan then the bank will recover the balance of payment by seizing the vehicle. As it’s a depreciable item, its value would be depreciated and the bank would not be able to recover the whole amount it had loaned out. Therefore high interest rate safeguards the loss that would be made on the car loan if the borrower is not able to pay off his/her debt to the bank. On the other hand it has placed a lower interest rate on home loans where they know that if the borrower is not able to pay off the debt, then the bank can recover the loaned out amount by selling the house and recovering for the loan and its cost (Hussein, R. 2014).#p#分页标题#e#
According to the graph illustrated in the lecture, the below table shows the history of the interest rate how it decreased and increased over the years.
Economy 经济
The main interest rate also known as the base rate is set by the Reserve Bank of New Zealand. The reserve Bank of New Zealand monitors what is happening in the economy. Therefore it has to stabilize the economy by increasing the interest rate or by decreasing the interest rates to some extend in order to ensure that the economy is not still but it has to keep moving. It has to stabilize the decreasing economy. If it feels that the inflation rate is most likely to increase then it may decide to increase the interest rate as a measure to reduce the demand and may also flush in more money into the economy in order to stabilize the economy growth. (Hussein, R., 2014).
Inflation 通货膨胀
Inflation occurs when lots of money is issued out for borrowing therefore it increases the demand and according to the economics theory as the demand increases then the price also goes up resulting in the shortage for the supply and increase in the price. For example the housing in Auckland. In the year 2008 the interest rate was 8% on the housing loans by the Reserve Bank of New Zealand and people could afford to get home loans. Thus the demand for houses increased and consequently the prices for the houses increased creating a high demand and high price for the houses in the housing market (Hussein, R. 2014).
International borrowings by New Zealand government
International borrowings are the loans or money borrowed from outside countries like U.S.A, Australia, China, etc. Therefore higher interest rate results in the increase in the cost of government interest payment on those outside loans. Consequently, this leads to higher tax rates on the New Zealand residents as they are the ones who pay off the governments debts through tax payments (Hussein, R. 2014).
Fiscal deficit of New Zealand’s Budget 新西兰财政赤字
Fiscal deficit looks at the government’s budget. If their spending is more than the revenue collected then it is considered as a deficit and if the spending is less than the revenue then it is a surplus. If the interest rate is higher as a result of the fiscal deficit, there will be less investments, the exchange rate would be higher resulting in less export (Hussein, R. 2014).
Impact of interest rate on savings 利率对储蓄的影响
The relationship between savings and interest rates in the New Zealand’s economy is said to be a positive. Which in other words mean that if the interest rates on saving are higher than people tend to save more because the more they save will result in more interest rates and higher return. But if the interest rate is low than they opt to save less and spend more on goods and services. Higher interest rates that could be gained from depositing money into deposit accounts attract people, households and business to save more. But if more people and business tend to save more and spend less a Paradox of thrift will result. Paradox of thrift is when all people start saving and that saving can as a result decrease their savings because if people will not spend than the demand will diminish for goods and savings. And if demand is diminished than no goods will be produced thus resulting in unemployment and no salaries and wages for people to save. Therefore there needs to be equilibrium between savings and spending of the households and business in order to keep the economy stable as consumption drives the demand for goods and services (Hussein, R., 2014).
Impact of interest rate on investment market 利率对投资市场的影响
Interest rates have a negative effect on the investment market. if the interest rates are higher than people, business and investors are not comfortable in investing because the higher the interest rates are, the more money they will have to return the bank and if the interest rates are low, than they will have to pay less money for their loans, thus they are liable to invest more.
Conclusion 结论
It can be concluded that Interest rates play a very significant role in New Zealand’s savings and investment market. The role of Reserve Bank of New Zealand is to monitor and control the economy and accordingly outline the levels of interest rates that need to be put in place so that a balance could be maintained in the savings and spending market with its monetary policy. But it cannot force an individual, household or business to save on their money or to take loans from the banks. Furthermore it can be said that the interest rate defines the level at which people save their money and wealth and also the level at which people involve themselves in investments. The high interest rates mean higher savings abut a lower investment level but a lower interest rate means a higher investment and lower savings rate.
|
 |
|||
| 网站地图 |
