Robertson: Drop in dollar to be expected
New Finance Minister Grant Robertson says the sharp fall in the New Zealand dollar is a typical reaction to changes of government around the world. Already weaker in the weeks following the September 23 election, the New Zealand dollar has fallen significantly since the Labour-led Government was announced.
Against the US dollar, the kiwi has fallen around 3.5 per cent since October 19, below US69c. On a trade weighted basis, the New Zealand dollar fell around 3.3 per cent between October 19 and October 30. While a weaker currency helps exporters by making products cheaper overseas, it makes imported goods more expensive and can boost inflation.
In an interview with RNZ Robertson said the volatility was to be expected when financial markets faced a change in government anywhere in the world.
‘‘Whenever there’s change, the markets will react to that, and we’ve seen that with other governments around the world. People will soon see the outcomes of the election and how it effects actual everyday policy and I’m confident they’ll see we’re a Government that’s focused on managing the economy sensibly’’ with rules around budget responsibility and a focus on creating ‘‘good solid jobs growth’’.
‘‘Any volatility we’ve see is a reaction to a change of government that would happen at any time anywhere in the world and I’m sure that the markets will see that they can be confident in our Government.’’
Robertson was ‘‘not especially’’ concerned by the drop.