No Quick Solution For High Dollar
The Reserve Bank does not have any quick tools or solutions which can bring down the overly-inflated value of the New Zealand dollar.
In a speech delivered last week to the New Zealand Manufacturers and Exporters Association in Auckland, the Governor of the Reserve Bank of New Zealand graham Wheeler said that the high value of the New Zealand dollar was not the only factor affecting the manufacturing industry in the country.
The Governor’s comments were aimed at quelling recent allegations that the Reserve bank should do more to decrease the value of the New Zealand dollar in order to aid the country’s manufacturing sector.
While Graham Wheeler did concede that the New Zealand dollar is currently significantly overvalued, he also said that the Reserve Bank had no simple solutions to address the issue.
He said that one element which raised the value of the dollar was a series of global imbalances, such as quantitative easing policies in other countries, the low levels of interest rates available overseas, and New Zealanders’ own poor records of money saving.
He went on to say that the difficulties facing the manufacturing industry are not only caused by the value of the dollar but also by the relative decline of the manufacturing sector in almost all developed economies in the world.
Photo by patrick h. lauke