More than talk from RBNZ
More than talk from RBNZ - 30 September
The Reserve Bank of New Zealand (RBNZ) announced yesterday that they had intervened in the currency markets during August, selling a net NZ$521m. Manufacturers and exporters will generally be pleased to see some action on the currency that has been such a significant headwind for the sector, say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive John Walley says, “For a long time now we have heard the RBNZ express concern over the high level of our currency, repeatedly calling it “unjustified and unsustainable”. It is great to see the RBNZ make an active effort to apply some downward pressure on our currency, which has failed to respond to falling dairy prices through 2014.”
“While this is a positive sign for manufacturers and exporters, the currency still sits a long way above fair value – we hope the RBNZ continues to be more ready and willing to do what is necessary to see the currency fall to a sustainable and justified level.”
“In the end our economy needs the right signals, a persistently under or overvalued currency can lead to significant distortions that are hard to correct and damaging to our economy over time.”