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

EMBARGOED UNTIL 0500 MONDAY JUNE 16 2014

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.

ENDS


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

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news