Chris Luxon says Kiwis should continue to see interest rates fall

The Reserve Bank says banks have room to cut their advertised rates further, and compete more for customers.

The Prime Minister says the Government is keeping a close eye on rates and bank margins.

He says the easing of capital requirement rules - stipulating how much money banks have to set aside for a rainy day - should also help bring loan rates down.

Luxon says banks are having to hold more capital - and hence charge higher interest rates - than they should have, but those changes should come through in the next few months.