(9 October 2012 – New Zealand) The Reserve Bank of New Zealand (RBNZ) has no immediate plans to print additional money to lower the exchange rate after a call from the Greens Party last week.The issue is in the spotlight in the lead up to the “job crisis summit” to be held this week, hosted by the country’s largest private sector union; the Engineering, Printing and Manufacturing Union (EPMU).
New Zealand’s manufacturing sector has been hit hard by the global economic downturn and there are estimates more than 20,000 jobs have been lost in the sector since 2008, with hundreds of redundancies announced in the past six weeks.
The EPMU says many of those job losses are a direct result of New Zealand’s high dollar. This morning, the kiwi was trading at US81.60 cents.
Greens co-leader Russel Norman proposed printing new money to invest in government earthquake bonds to fund the rebuild of Christchurch and refill the Natural Disaster Fund.
Prime Minister John Key dismissed the idea and said the RBNZ could only have one primary objective and keeping inflation low was appropriately its focus.
Since the GFC governments throughout the world have used quantitative easing to various degrees of success.