PM English says kiwi dollar at 'pretty positive' level for exporters

Wednesday 3rd May 2017

By Paul McBeth

May 3 (BusinessDesk) - Prime Minister Bill English says the kiwi dollar, which is down 4.3 percent since the Reserve Bank's policy statement in February, is now at a "pretty positive" level for exporters and providing a reasonable balance for the New Zealand economy.

Speaking to media after a pre-budget speech in Wellington, English played down the prospect of managing the currency which potential election kingmaker NZ First leader Winston Peters touched on today in a speech urging a reform of the Reserve Bank Act.

English said nobody had a "serious proposition" in managing the currency, and that even Singapore struggles to do so effectively.

"The currency's at a level which I think a lot of our exporters are finding pretty positive," English said. "If it can run around 70 cents where it is now, maybe a bit lower, that's not a bad balance for New Zealand."

As Finance Minister under his predecessor John Key, English often paid tribute to exporters who had weathered the strong currency during a protracted period of US dollar weakness.

At its February policy statement, Reserve Bank governor Graeme Wheeler said the New Zealand dollar was still higher than what was sustainable for balanced economic growth. At the time, the kiwi was trading at 72.44 US cents and 78.84 on a trade-weighted basis. Since then, the local currency has declined with rising US interest rates stoking demand for the greenback, and the kiwi recently traded at 69.58 US cents and 75.40 on a TWI-basis.

The RBNZ had been projecting the TWI to average 79 through the March quarter, slipping to 78.9 in the three months through June.

(BusinessDesk)

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