The Reserve Bank of New Zealand (RBNZ) released its Financial Stability Report on Tuesday. The RBNZ Graeme Wheeler said that risks to the global financial stability and to the dairy and housing sectors in New Zealand have increased.

"Global economic growth has softened over the past six months, and uncertainty over the path of economic and financial adjustment in China has helped to depress commodity prices and added to financial market uncertainty. Interest rates at historic lows are encouraging higher leverage, leading to a build-up in risk in international asset markets," Wheeler said.

"The dairy sector faces a second consecutive season of weak cash flow due to low international dairy commodity prices," he noted.