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

 


English says NZ dollar 'unsustainably high'

English says NZ dollar 'unsustainably high', out of line with commodity prices

By Tina Morrison

July 23 (BusinessDesk) - Finance Minister Bill English said the New Zealand dollar, which hit a record on a trade-weighted basis this year, is "unsustainably high".

"I share the same view as pretty well anyone who looks at the New Zealand currency and says it's unsustainably high," English told BusinessDesk on the sidelines of a Trans-Tasman Business Circle lunch in Wellington. "Almost anyone who has looked at it comes to the conclusion it's somewhere 10 to 15 percent overvalued."

The New Zealand dollar has been hovering near its post-float high of 88.40 US cents before weakening last week on slower inflation figures and a fall in dairy prices. The kiwi has gained about 6 percent so far this year, recently trading at 86.74 US cents, as a revival in the local economy pushes up interest rates.

Reserve Bank governor Graeme Wheeler is expected to hike the rate tomorrow for the fourth time this year, taking the benchmark to 3.5 percent and increasing the lure of the currency at a time when other major economies have their rates at record lows.

English said the currency appeared to be "out of line" with commodity prices. "I just observe that historical correlation, and it looks a bit high."

Still, he said New Zealand exporters had developed resilience because of the high currency.

"New Zealand is actually in reasonably good shape," English said. "We have had an export sector running at an 85 cent dollar now for five or six years and that has generated an enormous amount of shaking out in pretty much any business you can think of. It's a strong headwind for them and it is pushing more of them to do more."

"I've been pleased to see how many of the companies though are just getting on with that, rather than sitting there paralysed with something they can't change," he said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news