More than talk from RBNZ - 30 September
The Reserve Bank of New Zealand (RBNZ) announced yesterday that they had intervened in the currency markets during
August, selling a net NZ$521m. Manufacturers and exporters will generally be pleased to see some action on the currency
that has been such a significant headwind for the sector, say the New Zealand Manufacturers and Exporters Association
(NZMEA).
NZMEA Chief Executive John Walley says, “For a long time now we have heard the RBNZ express concern over the high level
of our currency, repeatedly calling it “unjustified and unsustainable”. It is great to see the RBNZ make an active
effort to apply some downward pressure on our currency, which has failed to respond to falling dairy prices through
2014.”
“While this is a positive sign for manufacturers and exporters, the currency still sits a long way above fair value – we
hope the RBNZ continues to be more ready and willing to do what is necessary to see the currency fall to a sustainable
and justified level.”
“In the end our economy needs the right signals, a persistently under or overvalued currency can lead to significant
distortions that are hard to correct and damaging to our economy over time.”