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


Waning interest to hedge amongst exporters

Media release
ASB Kiwi Dollar Barometer


Waning interest to hedge amongst exporters

Interest to hedge amongst exporters continues to decline
Just a small proportion of businesses use treasury policies to guide their hedging decisions
Small businesses more likely to base hedging decisions on the timing of cash-flows

The latest ASB Kiwi Dollar Barometer finds declining interest to hedge amongst exporters.

ASB Chief Economist Nick Tuffley says the proportion of exporters intending to hedge has dropped markedly over the last year.

“It’s likely the depreciation in the NZD in the lead-up to the survey discouraged exporters from hedging,” Mr Tuffley says.

When it comes to importing businesses however, the Barometer reveals a different story, with the proportion of importers intending to hedge continuing to edge up in the latest quarter.

While fewer exporters intend to hedge relative to importers, those exporters that do hedge do so across a greater proportion of their foreign exchange (FX) exposure.

The Barometer also reveals low use of treasury policies amongst businesses, with no small businesses surveyed having a treasury policy to guide FX hedging decisions. The majority of small businesses based their hedging decisions on the timing of cash-flows.

“These results suggest there is scope for small businesses to make greater use of external advice and to put in place guidelines for their hedging decision-making process in order to better manage their FX risks,” Mr Tuffley says.


Note to editors

The ASB Kiwi Dollar Barometer tracks exporters’ and importers’ exposures to foreign exchange risk, through surveying businesses with annual turnover of at least NZ$1 million.

The Barometer also surveys businesses’ expectations for the NZD/USD and hedging plans for managing foreign exchange risk.

Hedging involves reducing the risk of adverse currency movements to a business by using instruments such as FX forwards. These instruments can protect exporters from an appreciation in the NZD, and importers from a depreciation in the NZD.

For the June 2014 edition of the ASB Kiwi Dollar Barometer, East & Partners interviewed 399 businesses turning over at least NZ$1 million per year. The interviews were conducted between April 28 and May 9 2014. Businesses were asked a range of questions about their exposure to and views about the NZD.

© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news