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From: | "David & Jill Stevenson" <djstevo@quicksilver.net.nz> |
Date: | Tue, 17 Feb 2004 14:34:39 +1300 |
Allan,
The
Minister of Finance , Dr Michael Cullen , might be quite bright in his field
with a degree in History or is it a Social Science? However, wearing his
other hat when commenting on Finance and Economic affairs , I am less
confident as to his public statements .
When
questioned on the problems of a deteriorating $US he reassured with
the statement to the effect that he had a couple of options available to him .
When reminded of that reassurance at a later date ,and when NZ exporter`s
terms had worsened , he more or less admitted we (NZ er`s ) are more or
less flotsam and jetsam
when push comes to shove.
The $NZ
has floated since March 1985 and since that date ,to the best of my knowledge,
the RBNZ has not intervened directly in foreign exchange markets to influence
the $NZ value . We have not the muscle to intervene in our destiny to any effect
anyway. Unlike Japan who now favour their exporters heavily buying up the
$US . If we want to get cute we could argue how unfair philosophically
intervention is in the market place. You can have an export driven economy with
highly efficient producers outsmarting world competition in all aspects of their
business. But once they get their goods on board "unfair "interventions by
larger world powers negative all those skills when subjected to international
money markets .However that is another subject.
As I
understand it the $NZ exchange rate is based on a relationship with a "basket
"of international currencies with a heavy $US weighting . With a greater
emphasis on non US trading and greater attention to the Far Eastern countries
and both NZ and Australia having similar difficulties with the $US ( Free
trade Agreements between Australia and the US do not produce significant
advantages ,probably the reverse ) Given that position -could
the two ANZAC countries introduce some variable viz a viz the $US in their
exchange rate to counter undue impact of the $US decline on theur export
economies ?. I realise oil imports are expressed in $US which adds to
complications.
David
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