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Yield lures foreign investment

By Felicity Anderson, Nzoom.com Business News Editor

Wednesday 22nd May 2002

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Proof that international money is again flowing New Zealand's way has been delivered.

Foreign holdings of New Zealand government bonds rose to $11.6 billion in April, up from $10.8 billion in March.

That's a level not seen since around January 1999, when it reached close to $13 billion.

Foreigners now hold 47.9% of NZ government securities.

Westpac's currency strategist Johnathan Bayley says while complete capital flow data for the first quarter will not be available until June, the bond ownership figures show real money investment is playing a greater part in the NZ dollar's performance.

Bayley says the buy-in to bonds shows yield has been a key driver for the NZ dollar over the past three months.

He is not expecting that to change.

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