New Zealand dollar, the strongest performer of 16 major currencies the last week, is likely to rise above 80 US cents and cause further problems for the nationโs exporters, Prime Minister John Key was quoted saying in a Bloomberg report.
The dollar was โprobably going a little bit higher thanโ 80 cents, Key said in an interview with Television New Zealand, according to the report. It reached 79.76c cents on Nov. 4, the highest since April 2008.
โItโs very problematic,โ Key said. โIf youโre making something thatโs not linked to a commodity price, itโs a big problem.โ
The government was not planning to intervene in the New Zealand dollarโs rally as it was a โvery expensiveโ course of action and there was little evidence it had worked in the past, said Key. The countryโs exchange rate last rose above 80c cents on April 24, 2008.
โWhatโs forcing it up is, as we know, a very weak U.S. economy,โ Key was quoted saying. โ Source: Bloomberg