Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
(view article + comment)
David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
(view article + comment)
siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
(view article + comment)
Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
(view article + comment)
John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
(view article + comment)

Recent News

Greece heads towards historic no vote against austerity measures - New Zealand Herald, 6 Jul 2015 Greece faces an uncharted future as its interior ministry predicted today that more than 60 percent of voters in a hastily called referendum had rejected creditors' demands for more austerity in exchange for rescue loans.Prime Minister...

New Zealand businesses should prepare for repercussions of a Greek debt default - Stuff Business, 6 Jul 2015 Greece's rejection of a bailout offer from lenders for its financial woes has sent the New Zealand dollar down to a new five-year low.

Bank tips Reserve Bank to start slashing OCR - New Zealand Herald, 2 Jul 2015 Following another drop in export dairy prices overnight ASB economists are now predicting the Reserve Bank will reverse all of last year's increases to the official cash rate.A deteriorating outlook for the terms of trade and national...

Greece proceeds with vote plan as creditors rebuff overture - New Zealand Herald, 2 Jul 2015 Eurozone finance ministers have decided to break off talks on more aid for Greece until after it holds a weekend referendum, even as the Greek government pressed ahead with plans to let the people decide whether to accept more austerity...

NZ dollar falls on weak dairy auction - New Zealand Herald, 2 Jul 2015 International dairy prices continued to deteriorate at the latest GlobalDairyTrade auction, with the GDT price index dropping by 5.9 per cent from the last sale to record their ninth decline in a row and driving the New Zealand dollar...

.
Ad enquiry


28/7/11

Rebalance won’t happen while exchange rate constrains inflation


Print-friendly 0 comment(s) Posted in: In the media

Capital controls rather than the exchange rate must be used to restrain inflation say the New Zealand Manufacturers and Exporters Association (NZMEA). There are a number of options available to the Reserve Bank to restrict inflationary pressures through capital controls. These measures do not reduce returns and investment in the tradable sector.

NZMEA Chief Executive John Walley says, “Right now most developed countries are manipulating their currencies downwards in an attempt to spark an export led recovery. The notion that we would push ours artificially high to restrict inflation when the Government claims to be rebalancing the economy is ridiculous.”

“We need to learn a lesson from Australia. Their previously strong recovery is being stunted by a restrictively high dollar. Our currency is not far behind.”

“The Reserve Bank has shown with its introduction of the Core Funding Ratio that the world doesn’t end when a new tool is introduced. The RBNZ now needs to add a minimum retail deposit funded percentage and a loan to value ratio to this package.”

“All the while the ‘disinterested’ bank economists are talking up interest rates to pump their margins and lift the dollar, lowering their foreign debt exposure. The real economy is again the whipping boy of problems elsewhere in our economy.”

“We cannot expect exporters to lead an economic recovery when the biggest determinant of their success, the exchange rate, is allowed to be pushed higher and higher. The Government and the Reserve Bank need to devise a strategy that actually meets New Zealand’s real economic needs.”
 



tags: exchange rate, inflation, capital controls, reserve bank

comments

0 Comment(s)



No comments have been posted yet

Name:
Email:
Website URL:
Comment:
Remember Me:
Email Replies:
Please play the ball not the man.