Nzdollarmay rise tous90c

The New Zealand dollar is being tipped to go to an unprecedented US90c, putting increased pressure on jobs in the export and manufacturing sectors.

The kiwi’s rise to US84.5c came just days after 192 redundancies at Summit Wool Spinners in Oamaru.

More jobs will be lost or moved overseas if the dollar moves higher, an industry leader says.

Manufacturers, particularly those exporting to North America, become less competitive as the currency climbs.

More broadly, New Zealand often benefits from a strong kiwi.

Imported petrol is cheaper, as are other items New Zealanders rely on, including drugs and computers.

Importers Institute secretary Daniel Silva said New Zealanders bought imports in larger volumes when the currency was high because prices were lower.

But Manufacturers and Exporters Association chief executive John Walley said manufacturers lost profitability on their overseas sales as the currency increased in value.

Also, domestic manufacturers found it tougher to compete with imports’ prices.

‘‘Ultimately, it has to be bad for New Zealand because the activity will either cease here, [for example] Summit, or will go offshore, [for example] Fisher & Paykel Appliances. The higher the currency, the more likely it will happen.’’

The price of the currency remains well above its long-term average, about US80c.

BNZ economist Tony Alexander predicted the kiwi will top 90c before the end of the year as the Reserve Bank gets closer to tightening monetary policy (by raising the OCR).

ASB chief economist Nick Tuffley tipped the kiwi to climb towards US87c during the year.