Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Exporters Warned To Batten Down

Thursday, July 4th, 2002

Exporters Warned To Batten Down Against Exchange Rate Surge

Exporters to Australia are being warned to brace themselves for much more difficult trading conditions after yesterday's widening of the gap between New Zealand and Australian interest rates to one per cent.

Exporters should expect leaner times far earlier than the Reserve Bank thinks, the Employers & Manufacturers Association (Northern) says.

"The Reserve Bank's decision yesterday to lift the Official Cash Rate to 5.75 per cent most likely signals another surge in the New Zealand dollar," said Bruce Goldsworthy, EMA's Manager of Manufacturing Services.

"The kiwi dollar leaped from around 43 cents US to 49 cents US in the three months to early June as the Bank increased the OCR by 0.25 per cent in each of those months. We expect the tsunami back again for exporters any time.

"In February the Reserve Bank forecast a slow appreciation in the exchange rate, but it leapt unexpectedly upwards as the US dollar weakened, and offshore financiers pushed funds here to take advantage of the differential between US and New Zealand interest rates.

"Unfortunately arbitrage-driven demand is also sending our dollar higher against Australia's.

"While the higher dollar has some benefits for importers of raw materials and equipment priced in US dollars, it is proving disastrous for exporters to Australia.

"In the 13 years from 1985 to 1998 the cross rate with Australia averaged 81 cents. One year ago it was 78.5 cents. Today it's 11 per cent higher at 87 cents and climbing.

"It's five years since the cross rate was at this level.

"No one forecast it would go this far this quickly. The highest predictions six months ago were for it to reach 85.5 cents sometime later in the year.

"For the year ended March our manufacturers sent $4.3 billion of goods to Australia, our largest export destination.

"A decade ago 40 per cent of manufactured exports went across the Tasman. This is now down to 34 per cent. While exporters have diversified their market destinations, they have also lost substantial market share in Australia.

"Yesterday's events will see margins for trans Tasman exports cut further, with small and medium sized exporters the hardest hit."


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Also, Loan Interest: Productivity Commission On Tertiary Education

Key recommendations include better quality control; making it easier for students to transfer between courses; abolishing University Entrance; enabling tertiary institutions to own and control their assets; making it easier for new providers to enter the system; and facilitating more and faster innovation by tertiary education providers... More>>


Higher Payments: Wellington Regional Council Becomes A Living Wage Employer

Councillor Sue Kedgley said she was delighted that the Wellington Regional Council unanimously adopted her motion to become a Living Wage employer, making it the first regional council in New Zealand to do so. More>>


Scoop Images:
Dame Patsy Reddy Sworn In As Governor-General

This morning Dame Patsy Reddy was sworn in as the New Zealand Realm’s 21st Governor-General. The ceremony began with a pōwhiri to welcome Dame Patsy and her husband Sir David Gascoigne to Parliament. More>>


Ruataniwha: DOC, Hawke's Bay Council Developer Take Supreme Court Appeal

The Department of Conservation and Hawke's Bay Regional Investment Company (HBRIC) are appealing to the Supreme Court over a conservation land swap which the Court of Appeal halted. More>>


With NZ's Marama Davidson: Women’s Flotilla Leaves Sicily – Heading For Gaza

Women representing 13 countries spanning five continents began their journey yesterday on Zaytouna-Oliva to the shores of Gaza, which has been under blockade since 2007. On board are a Nobel Peace Laureate, three parliamentarians, a decorated US diplomat, journalists, an Olympic athlete, and a physician. A list of the women with their background can be found here. More>>

Gordon Campbell: On The Key Style Of Crisis Management

At Monday’s post Cabinet press conference Key was in his finest wide- eyed “Problem? What problem?” mode. No, there wasn’t really a problem that top MPI officials had been at odds with each other over the meaning of the fisheries policy and how that policy should be pursued... More>>


Mt Roskill: Greens Will Not Stand In Likely Post-Goff By-Election

“The Green Party’s priority is changing the Government in 2017, and as part of that we’ve decided that we won’t stand a candidate in the probable Mt Roskill by-election... This decision shows the Memorandum of Understanding between Labour and the Green Party is working." More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news