New low for the dollar
By
MARK REYNOLDS
The New Zealand dollar slid US2c yesterday to a new low for the year. It closed at U560.60c, 17 per cdnt below its record high of U572.75c, set on June 20. Money market dealers said that a front-page article in Wellington’s “Dominion” newspaper, also printed in the “Australian” national newspaper, was largely responsible for offshore investors bailing out. The article said the Government had made a dramatic shift in economic policy aimed at securing export-led growth and creating jobs.
It was dismissed by the Minister of Finance, Mr Douglas, as “sheer misinformed rubbish,” the Press Association reported. Christchurch dealers said it was "more media hype.” But the damage had been done. “It was too late,” dealers said. Monday foreign-exchange trading in New Zealand is often directionless because most of the overseas exchanges are closed. Trading in New York and London overnight and early today will give more indication of trends in the New Zealand currency.
The New Zealand dollar has been falling since the Reserve Bank gave its dictum two weeks ago that interest rates should fall — and they did.
The trend is complicated by the strength of the United States dollar. This has been soaring in spite of the combined attempts of central banks.
However, the Reserve Bank trade-weighted index, a measure of the dollar against a number of currencies, fell 2.4 per cent from Friday to yesterday. It has fallen. 4.26 per cent since Thursday. Details, page 26
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Press, 30 August 1988, Page 1
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248New low for the dollar Press, 30 August 1988, Page 1
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