Dollar fall restores some advantage to exporters

Media statement Tuesday, October 28th, 2008

Dollar fall restores some advantage to exporters

The drop in the New Zealand dollar against the US currency restores competitive advantage to local exporters, says Bruce Goldsworthy, Northern Manager of Export New Zealand.

"The drop in the NZD takes the cross rate with the USD below its 10 year average of 57.4 for the first time in over five years," Mr Goldsworthy said.

"Exporters will be pleased they have the dollar going for them after a sustained period of relative disadvantage.

"But they won't be celebrating much as the currency gain is likely to be offset by a fall in demand in most offshore markets.

"The cross rate with Australia, our most important export destination by far, is still above its long term average of 85.8 though this may come back before long.

"The sectors in New Zealand to benefit most will be those with the highest local content and value added, while those reliant on imported raw materials and components will be adversely affected.

"Our exporters traditionally have had to manage with a pretty volatile NZD and this latest rapid depreciation presents yet another challenge for them."

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