Strength of N.Z. economy

Press, Volume CXII, Issue 32966, 12 July 1972, Page 3

Strength of N.Z. economy

f.\civ Zealand Press Association I WELLINGTON, July 11. The value of the New Zealand dollar was at the bottom of its band of permissible fluctuation solely to equate precisely with the Australian dollar and facilitate Tasman trade, said the Minister of Finance (Mr Muldoon) in Parliament today.

Mr R. J. Tizard (Lab., Pakuranga) had asked hint if it was true the dollar had been at the bottom of its band since December, and if the strength of the New Zealand economy was better illustrated by this fact than by the Minister’s ability to borrow in France. Mr Muldoon said the state . ment was misleading because it implied a depreciation in value of the New Zealand dollar since late last year, whereas the opposite was the case. “When major currencies were realigned in December it was decided to fix our exchange rate for United States dollars at the bottom of the 2| per cent band around parity, as permitted by I M F . rules,” he said. “This depreciation was. however, more than offset by; the devaluation of the United States dollar against gold by 7.9 per cent.” New Zealand’s exchange rate position and its ability to borrow overseas at favourable interest rates were, therefore, complementary illustrations of the strength of the New Zealand economy, [the Minister said. [ But he agreed that buyers

of New Zealand notes in places such as Hong Kong normally bought at a discounted rate, regardless of the dollar’s strength in international trading.