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

 

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news