Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Brash Urges "Cool Heads And Rational Thinking"

Brash Urges "Cool Heads And Rational Thinking" On Currency Fall

5 October 2000


Reserve Bank Governor Don Brash today called for people not to overreact to, or be simplistic about, the recent marked fall in the exchange rate.

In a speech in Auckland to the American Chamber of Commerce in New Zealand, Dr Brash today said: "There is no single, simple, explanation for the fall in the value of the New Zealand dollar over the last two or three years. ...Exaggerated claims that the fall can be pinned on just one thing - whatever that one thing might be - are almost certainly wrong, and are unhelpful in improving our understanding of the implications. At this time, we need cool heads and rational thinking, not extravagant claims or counter-claims."

Dr Brash began his address by summarising a range of factors that could have contributed to the recent sharp fall in the New Zealand dollar. He then reviewed the likely effects, saying these depended on whether the primary influence was the rise in the US dollar, suggesting a reversal was possible fairly soon; or whether New Zealand-specific factors were predominant, in which case the effects were likely to be more enduring, he said.

Dr Brash said the lower dollar was "encouraging the production of goods and services which will reduce our balance of payments deficit". However, he also warned that this would only occur if those in the domestic economy showed restraint in setting "prices, fees, wages and salaries". Otherwise, he said, the Reserve Bank would have to increase interest rates to contain increased inflationary pressures and that would cause a "temporary increase in unemployment and a loss of output."

"Sound policies across the whole breadth of the economy are the best way of ensuring that the exchange rate recovers over the medium term, and of course the best way of ensuring prosperity for all New Zealanders as well. A prosperous New Zealand, with low inflation, will enjoy a strong currency over the long term, and productivity growth to justify that strength," Dr Brash concluded.

For further information contact
Paul Jackman
Corporate Affairs Manager
Ph 04 471 3671, 021 497 418, home 04 938 8177, Jackmanp@rbnz.govt.nz

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news