NZ dollar strong due to weak U.S. economy: PM

20:15, October 11, 2010      

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New Zealand's currency is suffering the consequences of a weak U.S. economy, and there's very little that can be done about the strong New Zealand dollar, Prime Minister John Key said on Monday.

Key told a post-Cabinet press conference that the government always had some concerns when the exchange rate presented problems for exporters.

"In the case of the NZ-U.S. exchange rate we're at the level where it's starting to create concerns for some of our exporters," he said.

This was a very difficult position for both the Reserve Bank and the government, as the strength in the NZ-U.S. exchange rate was a reflection of the weakness of the U.S. dollar.

"It has been consistent around the world whether you look at Canada or Brazil or the Euro," he added.

Downward pressure on inflation meant lower petrol prices and a lower chance the governor of the Reserve Bank would raise interest rates, providing some silver-lining for the economy, Key said. However, when it came to exporters, there was very little the government or the Reserve Bank could do, Key said.

What was needed was a strengthening consumer base in the United States, Key added.

Source: Xinhua


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