Overseas debt pushed higher

Press, 4 March 1988, Page 2

Overseas debt pushed higher

By

BRENDON BURNS,

political reporter

The weakening of the New Zealand dollar against some currencies as a result of the October stockmarket crash pushed the nation’s long-term overseas debt even higher in the last quarter of 1987. ; . I !•'

Long-term debt, which records loans of more than a year's duration, rose to $33.06 billion as at December 31. That was an increase of $2.06 billion on the September quarter. Such debt comprises official Government sector, private' sector and other Government organisations’ debt.

The biggest increase came in official Government debt, which includes the Reserve Bank, and which is responsible for currency management and overseas reserves. This sector's debt rose

51.29- billion to $18.65 bil-, lion, I ! J Other ■ Government organisations, had their' debt Increase $330 million to $6.45 billion. ’ I . H Private sector debt rose to $7.63 billion, up $440 million. !;' The Minister of! Finance, Mr Douglas, and ; his Opposition counterpart, Miss Ruth Richardson, shared the view that; the drop in the value of. the New Zealand dollar late last year had caused overseas debt to increase. Mrj Douglas said 'the increase would have been larger if the Government

had not diversified the currencies iri which it held debt. ! ; Miss Richardson said the debt rise was a taste of what was to come when the New Zealand dollar deprecated against all main currencies. The current high ex-, change rate masking'' the oppressive level of debt. j "But at the) same time it is making the servicing and debt repayment out of our earqings all the more difficult because the export sectbr is being dragged down in the process," she said.