Wider earth­quake im­pact to be lim­ited


While the lat­est earth­quake is re­garded as one of the largest to hit New Zealand in decades, the tim­ing and lo­ca­tion has econ­o­mists pre­dict­ing the dis­rup­tion may be lim­ited.

Although Wellington’s cen­tral busi­ness district was ef­fec­tively closed on Mon­day, the most se­vere im­pact ap­pears to be in sparsely pop­u­lated ar­eas.

In the days fol­low­ing the dev­as­tat­ing 2011 Christchurch earth­quake the Re­serve Bank slashed in­ter­est rates by 50 ba­sis points, to fend off the threat of fall­ing con­fi­dence, as the hu­man toll and tens of bil­lions of dol­lars worth of dam­age emerged.

But on Mon­day morn­ing econ­o­mists in­di­cated they did not see the same im­pact this time.

‘‘While the earth­quake was se­vere, the lo­ca­tion sug­gests a lim­ited eco­nomic im­pact,’’ ASB chief econ­o­mist Nick Tuf­fley said.

‘‘Sev­eral provin­cial towns have been hit hard, but to date only mod­er­ate dam­age has been re­ported in New Zealand’s ma­jor ur­ban cen­tres. How­ever, it is too soon to say with­out fur­ther in­for­ma­tion on the ex­tent of dam­age and dis­rup­tion, par­tic­u­larly around in­fra­struc­ture.’’

The earth­quake oc­curred when fi­nan­cial mar­kets were close, but when cur­rency trad­ing opened at 7am, the im­pact on the New Zealand dol­lar ap­peared lim­ited.

The kiwi closed at US71.1 cents on Fri­day evening, and dropped around US0.4c when the market opened, be­fore re­cov­er­ing slightly, ac­cord­ing to in­for­ma­tion from West­pac.

West­pac cur­rency strate­gist Imre Speizer said at this stage the earth­quake was not of the same scale as Christchurch 2011.

‘‘That will be fore­most in the mar­kets’ mind, what is the ex­tent of the dam­age?,’’ Speizer said.

The Nee­dles Bridge just north of Ward after Mon­day morn­ing’s earth­quake.

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