'Exchange rate
Sir,—W. Rosenberg fails to appreciate the difference between a sound exchange rate policy and the pathetic reaction to the inevitable which resulted in the depreciation of our currency from 1976. The results were immediately passed on to other sectors of the economy as wage and cost increases. There
is no benefit to exporters in that and therefore no increased employment. What I propose is a floating exchange rate policy as adopted by the Australian Labour Government which would initially result in a devaluation of perhaps 20 to 25 per cent. This would be coupled with a sound monetary policy to ensure that the benefits remained in the export sector. This would increase export jobs and also help to protect our local industry by making imports dearer. Devaluation increases the value df all our exports in New Zealand dollar terms and so makes servicing our overseas debts much more manageable. I urge W. Rosenberg to look at the I.M.F. prescription for heavily-indebted Mexico — a big devaluation. — Yours, etc., J. C. GLASS. February 27, 1984.
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Press, 29 February 1984, Page 16
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175'Exchange rate Press, 29 February 1984, Page 16
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