The Canterbury Manufacturers’ Association (CMA) says that cross rates are becoming a strategic issue for exporters, having ceased being tactical about a year ago, and for many firms, business models are changing.
“Many exporters are a bit more than disappointed with this latest lift in the OCR, given the huge pressure that the strong NZD has put on their balance sheets. However, the Reserve Bank has implied that it will not raise interest rates again, the NZD did not spike upwards today, things did not get worse from the exchange rate viewpoint – for now”, says Chief Executive John Walley.
“Although the NZD has eased slightly today, there still needs to be clear signs that domestic inflation pressures are receding, along with the trend in the exchange rates ahead of the next OCR statement before exporters start to breath easier”, says Mr. Walley.
“The Government has to redress its spending policies, moving away from those that drive domestic inflation and offer solid support for exporters”.
“Such action will not support export development in the long term. Policy settings require some real change. Manufacturers and exporters must not forever be the collateral damage of inflation control. They might be paying taxes here now, but not for much longer. Some are giving voice to the idea that New Zealand cares little for us, so why bother?”