Forum Archive Index - September 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

I feel that there are many facets to the low dollar:

 

For a start, NZ has been able to import cheap Chinese goods in the last few years. This may not remain so.

 

A country with a strong currency has more room to move. Interest rates of such a country are relatively low. Interest rates in a country like NZ are relatively high.

 

And Brash needs to constantly keep an eye on the outflow of capital should he reduce these rates before the bulk of the others do.

 

A low NZ dollar can invite other countries to show takeover interest in NZ export sensitive goods, eg. tourism or farmland, wine producing areas.

 

True, a low dollar is beneficial to farmers and in these times enable a country to compete. And, past Reserve Bank policies which created a high dollar, have not worked.

 

Thus, a lower dollar may temporarily suit a country with predominantly commodity exports.

 

But even if we did have a much higher dollar and we could  

buy overseas assets much cheaper, then we still need the skills to run larger companies: There is a tendency to destroy capital in a big way!

 

I found out years ago that these skills were not there and Ron Brierly confirmed that by referring to the then Brierly Board. A very good reason why he left. 

 

I believe that the Agrarian sector has these skills so far. That is understandable. 

 

Gerry