DOLLAR WOES CONTINUE
The strength of the kiwi dollar is punishing our exporters, particularly manufacturers. Last week the kiwi came close to hitting US80c and Reserve Bank Governor Alan Bollard says the high dollar might derail New Zealand’s “tepid” economic recovery.
Even the Prime Minister acknowledges the harm it is causing. Which makes it mystifying why he refuses to consider the many tools available that can moderate the dollar’s volatility.
Typically though, John Key let it be known this week that he rings Dr Bollard to talk about the dollar – giving the impression he is doing something, when he fully intends to do nothing and leave it to the market.
New Zealand is unusual internationally in having a single policy goal for the Reserve Bank. Australia, in contrast, is also required to aim for a stable currency, full employment, and the economic prosperity and welfare of the people of Australia. Labour is looking at introducing the same outcomes for our Reserve Bank.
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