Exporters demand action on exchange rate
The Reserve Bank needs to act against the overvaluation of the New Zealand dollar, a business lobby group says.
The Reserve Bank needs to act against the overvaluation of the New Zealand dollar, a business lobby group says.
New Zealand’s currency overvaluation cannot be simply put down to economic weakness elsewhere, New Zealand Manufacturers and Exporters Association chief executive John Walley said.
Rather, the valuation was the result of the Reserve Bank's inaction and interventionist policies overseas that accounted for a persistently overvalued currency, Mr Walley said.
“The ‘there is nothing we can do’ mind-set needs to change,” he said.
“The economic weakness of others we can’t control but our own policy response we can. Changes need to be made to support an export-led recovery for New Zealand.”
Mr Walley said during the past year other countries central banks took action to lower their own exchange rates, whether that was through quantitative easing in the United States and the United Kingdom, capital controls in Canada and Brazil, or direct currency management in Switzerland and Singapore.
“There has been no such action in New Zealand and our export sector, particularly the high added value sector, continues to suffer as a result.”
“It is complacent to suggest there is nothing we can do when many countries have successfully supported their export sectors,” Mr Walley said.
“We need sensible and pragmatic policy from the government and the Reserve Bank to provide similar support our export sector.
“We are an export exposed country – we cannot simply sit back and pretend we cannot have some control of our own destiny.”
Colin Williscroft
Mon, 16 Jan 2012
Mon, 16 Jan 2012
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Exporters demand action on exchange rate
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