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 nation’s exporters, Prime Minister John Key was quoted saying in a Bloomberg report.
The dollar was “probably going a little bit higher than” 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.
“It’s very problematic,” Key said. “If you’re making something that’s not linked to a commodity price, it’s a big problem.”
The government was not planning to intervene in the New Zealand dollar’s rally as it was a “very expensive” course of action and there was little evidence it had worked in the past, said Key. The country’s exchange rate last rose above 80c cents on April 24, 2008.
“What’s forcing it up is, as we know, a very weak U.S. economy,” Key was quoted saying. – Source: Bloomberg
