Bollard says high NZ dollar is not helpful for NZ economy

Bollard says high NZ dollar is not helpful for New Zealand economy

By Paul McBeth

May 11 (BusinessDesk) – The strength of the New Zealand dollar, which edged close to a post-float high this month, isn’t helpful to the economy, Reserve Bank Governor Alan Bollard said.

"The New Zealand dollar has continued its record of being surprisingly strong," Bollard said at a media conference after the release of the bank’s financial stability report. "It would be better for the New Zealand economy if the New Zealand dollar was not so high."

The dollar recently traded at 79.35 U.S. cents, up from 79.23 cents yesterday, bringing its advance this year to 2.7%. It was at 68.16 on the trade-weighted index of major trading partners’ currencies from 68.20 yesterday.

The kiwi fell to 73.24 Australian cents from 73.48 cents previously and has fallen about 4% against its Australian counterpart this year. The Australian dollar has be benefited from a weaker greenback, relatively high interest rates and the strength of the economy across the Tasman.

Bollard said today that while the kiwi dollar is high against most of its trading partners it is “very low against the Australian dollar, which opens up very interesting export opportunities."

(BusinessDesk)

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