NZ First/BERL tackle overvalued dollar
New Zealand First wants an amendment to the Reserve Bank Act to correct a "highly over-valued" New Zealand dollar.
A report from economic and business research company BERL into the merits of such an amendment is expected to be released today.
List MP Andrew Williams says the act was created in 1989, when there was a “whole different epoc”.
He believes there is broad consensus among the International Monetary Fund, manufacturers and exporters that the dollar is overvalued.
The current act has given New Zealand a chronically overvalued exchange rate and as a result every week businesses are closing, jobs are being lost and markets are in jeopardy, he says.
THe exchange rate has encouraged people to "park" money in New Zealand to earn higher interest rates, which has led to all manner of distortions.
“The facts of an over-valued exchange rate are stark – loss of competitiveness, costing us markets, costing us jobs and losing New Zealand many major employers.”
Mr Willams says the bill New Zealand First has introduced to amend the Reserve Bank Act will mean the bank can concentrate on a balanced macro-economic policy, in which price stability is no longer the priority.