Special Note: Non-residents' holdings survey

As noted last month, the Reserve Bank of New Zealand (RBNZ) initiated a full review of the methodology for the survey of non-residents' holdings of New Zealand wholesale debt securities. The new method includes data not previously available to the RBNZ and enhances the RBNZ's ability to check the integrity of data as well as reducing the overall compliance burden on many respondents.

The effects of the changes include:

• greatly enhanced reliability of the report through improved validation;
• superior ability to analyse and report due to finer granularity of the data;
• improved data capture to meet internal and external (in particular Statistics New Zealand) demands on the RBNZ's data; and
• significantly lower reporting burden on respondents.

The changes have improved the RBNZ's ability to monitor repurchase transactions (both bought and sold) with offshore parties. As a result, it appears that offshore holdings have been overstated in the past. Supplementing officially released data (July 2005 to September 2000) with trial data (July 2004 to June 2005), it is estimated that in the period July 2004 until September 2005 overseas holdings were typically overestimated by about $1.3bn.

Historical data based on the old survey are available in the discontinued tables.

17 November 2005