6 December 2007

No Relief In Sight For Exporters

The Reserve Bank has today confirmed that exporters will continue to be crippled by a high New Zealand dollar for the foreseeable future, says NZ First MP Doug Woolerton.

“Our monetary policy is nothing short of suicide for our exporters. Why would an export-based economy hobble exporters to cool off the economy? It is madness.

Mr Woolerton’s comments follow the release of the Bank’s quarterly Monetary Policy Statement this morning. In the statement, the Bank stated it expected interest rates to remain high until 2010, and that it expected the New Zealand dollar to remain high also.

“While unchanged, New Zealand’s Official Cash Rate of 8.25% remains one of the highest in the developed world. This makes our interest rates attractive to foreign investors, which drives up the value of the New Zealand dollar and slashes the returns for our exporters,” said Mr Woolerton.

“Nevertheless, the Reserve Bank Governor is in an unfortunate position. He is bound by the Reserve Bank Act, which obsessively focuses on inflation without taking account of New Zealand’s overall economic health.

“Instead, monetary policy should take the value of the NZ dollar, exports, and economic growth into consideration.

“Increasing exports is the way to improved prosperity and living standards. Our current monetary policy constrains export growth, and with it our chances for a better future. The sooner we resolve this issue, the better our country will be for it,” said Mr Woolerton.

ENDS

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