The Kiwi is the world’s 10th most traded currency.
Every day up to NZ$140 billion is traded. Currency traders, every minute, 24 hours a day, are holding a referendum on New Zealand.
It matters. A significant part of the recent rise in petrol prices is the fall against the US dollar.
On 25 August the Kiwi began falling against all 17 currencies monitored by the Reserve Bank. With New Zealand far from international conflict and exports strong, the Reserve Bank and Treasury had predicted the Kiwi would rise.
What happened on 25 August?
The Herald published its poll of polls showing Labour, the Greens, TOP and Te Pāti Māori winning government.
The world began dumping the Kiwi.
The Kiwi fluctuates, but the trend is clear.
The Greens say the rich will pay. Even before they move into the Beehive, we are all paying. The Kiwi has already lost nearly 6% against the US dollar.
Then there is the bond market.
In Britain, Liz Truss introduced a budget the bond market considered unsustainable. Interest rates rose. Her government famously had a shorter shelf life than a lettuce.
The bond market will decide whether a Labour–Green–TOP–Te Pāti Māori government is fundable.
New Zealand is already borrowing to pay its bills. A government promising billions more in spending must find someone willing to lend.
Would you lend money when Chlöe Swarbrick is making spending decisions?
With a floating currency, there is no floor beneath the dollar. Nor is there a ceiling on interest rates.
A Hipkins-led Labour–Green–TOP–Te Pāti Māori government would have the shelf life of a bottle of milk.
The Honourable Richard Prebble CBE is a former member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, becoming its leader from 1996 to 2004. This article was sourced HERE
On 25 August the Kiwi began falling against all 17 currencies monitored by the Reserve Bank. With New Zealand far from international conflict and exports strong, the Reserve Bank and Treasury had predicted the Kiwi would rise.
What happened on 25 August?
The Herald published its poll of polls showing Labour, the Greens, TOP and Te Pāti Māori winning government.
The world began dumping the Kiwi.
The Kiwi fluctuates, but the trend is clear.
The Greens say the rich will pay. Even before they move into the Beehive, we are all paying. The Kiwi has already lost nearly 6% against the US dollar.
Then there is the bond market.
In Britain, Liz Truss introduced a budget the bond market considered unsustainable. Interest rates rose. Her government famously had a shorter shelf life than a lettuce.
The bond market will decide whether a Labour–Green–TOP–Te Pāti Māori government is fundable.
New Zealand is already borrowing to pay its bills. A government promising billions more in spending must find someone willing to lend.
Would you lend money when Chlöe Swarbrick is making spending decisions?
With a floating currency, there is no floor beneath the dollar. Nor is there a ceiling on interest rates.
A Hipkins-led Labour–Green–TOP–Te Pāti Māori government would have the shelf life of a bottle of milk.
The Honourable Richard Prebble CBE is a former member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, becoming its leader from 1996 to 2004. This article was sourced HERE
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