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New Zealand Announces Mortgage Holidays, Business Finance Support

newzealand march24 23mar20 lt

New Zealand is set to provide a major financial support package for home owners and businesses that are badly hit by coronavirus, or covid-19.

Finance Minister Grant Robertson said the package will include a six month principal and interest payment holiday for mortgage holders and SME customers whose incomes have been affected by the economic disruption from COVID-19.

"We are acting quickly to get these schemes in place to cushion the impact on New Zealanders and businesses from this global pandemic," Robertson said.

The central bank agreed to help banks put this in place with appropriate capital rules. In addition, it has decided to reduce banks 'core funding ratios' to 50 percent from 75 percent, further helping banks to make credit available.

The government together with the central bank will implement a NZ$6.25 billion Business Finance Guarantee Scheme for providing short-term credit to cushion the financial distress on solvent small and medium-sized firms affected by the COVID-19 crisis.

The maximum term of the loan will be three years and the government will carry 80 percent of the credit risk, with other 20 percent to be carried by the banks.

Minister of Transport Phil Twyford, on Tuesday, announced details of the Government's support package to keep key air freight moving and ensure New Zealanders retain access to essential goods during the four-week level 4 lockdown.

About NZ$600 million was set aside for the aviation sector as part of the NZ$12.1 billion COVID-19 support package, Twyford added.

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