Bollard says RBNZ reviewing scope for intervention

The Reserve Bank of New Zealand has been watching the appreciation of the kiwi dollar and reviewing the prospects for intervention though Governor Alan Bollard says there are drawbacks.

Any action by the RBNZ would need to be “opportune,” he told MPs at a select committee hearing in Wellington.

“We have certainly been watching that closely and are reviewing it on a regular basis,” he said. “There’s a long-term over-valuation” of the kiwi against the greenback. “That is driven by major US and international developments. We don’t believe you can influence that.”

He said efforts by the central banks of Japan and Switzerland had got an initial impact without much long-term effect.

The New Zealand dollar tumbled to 77.49 US cents from 78.35 cents after Bollard said earlier today that a high currency was holding back a rebalancing of the economy. The currency has surged almost 18% since early June.

Businesswire.co.nz

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