$20 million lost for every one cent rise

$20 million lost for every one cent rise in exchange rate says Seafood Industry

17 July 2007

Failure to address the overvalued dollar effectively is causing huge financial losses for the industry and the country, says the New Zealand Seafood Industry Council’s General Manager Trade Alastair Macfarlane.

“The overnight increase in the dollar has cost the sector the equivalent of the net returns of the entire Pacific Oyster production for this year,” Mr Macfarlane said. “It’s an appalling situation for export dependent industries such as ours. Every one cent rise in the exchange rate equates to a loss of NZ$20 million.”

Another rise in the OCR (Official Cash Rate) will only increase the financial pain for the sector, Mr Macfarlane said.

“Lifting the OCR has proven ineffective. The New Zealand dollar has simply become a magnet for currency speculators and they have benefited from ever increasing interest rates at the expense of exporters.”

The combination of high exchange rates and growing business and compliance costs is disastrous for the seafood sector, he said.

“Good people have lost their jobs or businesses already, and sadly more will follow. Dr Bollard and the government need to re-think their approach to inflation.”

ENDS

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