Kiwi killing off jobs
Jobs are under threat with some already being lost as a result of the strong New Zealand dollar, which is being pushed up by interest rate increases. E.g. the Reserve Bank this morning increased the official cash rate (OCR) for the first time since July 2010;The RBNZ cut rates 50 basis points to 2.5 per cent in March 2011 after the February 22 Christchurch earthquake.
High RBNZ led interest rates tend to attract overseas investors into New Zealand seeking better returns on their money , driving the New Zealand dollar higher against other currencies. Economists are predicting the OCR will be raised several times in the next year or two to keep a rein on inflation, which will again tend to push the kiwi higher. Exporters want the bank and Government to use other tools and policies to keep parts of the economy including house prices in check, and at the same time not drive up the currency. As a result , investment in the trading sector would suffer over time because the high dollar cut back on the competitiveness of exporters ,we may see fewer jobs and more closures over time.
Some jobs were already disappearing from the manufacturing sector. Investment in the trading sector would suffer over time because the high dollar cut back on the competitiveness of exporters. Some export sectors including dairy had never had it so good, but other sectors even in the primary arena were suffering for New Zealand . Partly because they're not good at it, but also because they're uncompetitive. Anyone that's in the traditional export economy to Australia is really struggling."