The dollar has hit a post-float high on the trade weighted index for the second time in two months, showing it is critical that concrete action is taken to make our overvalued exchange rate more competitive, says Labour’s Finance spokesperson David Parker.
“The dollar has been too high for too long and it’s crippling Kiwi exporters. Now it’s at the highest level on the trade weighted index since it’s was floated.
“One of the reasons that the Tiwai Point aluminium smelter may be shut down is that the dollar’s strength is seriously impacting on their business. Over 3000 people rely on the smelter for their jobs.
“The high dollar is costing this country jobs. Last year 17,000 people lost their jobs in manufacturing. As we’ve heard in the manufacturing inquiry the blame for many of those losses can be pinned on the overvalued exchange rate.
“The IMF says the dollar is 15 per cent overvalued. It’s breaking the back of manufacturing exporters outside the primary sector.
“International practices have changed. Our trade competitors are addressing their exchange rates yet National still says there’s nothing they can do. That’s an insult to exporters.
“Our Reserve Bank has an obsolete tunnel-vision mandate to give primacy to inflation over other important factors such as the exchange rate and employment. We need to change the Act to give the Bank a 20/20 perspective on the economy so our exchange rate can be more competitive,” says David
9th April 2013 Media Statement