NZ government bonds in high demand
(31 January 2012 – New Zealand) New Zealand's government bond securities have drawn significant interest from China and other foreign buyers as the nation cashes in on its growing status as a safe haven for investors, according to Prime Minister John Key.
Europe's debt crisis has prompted some market analysts to describe bonds issued by the New Zealand government as amongst the new safe haven assets.
Key said the level of demand from offshore buyers is a major reason why the New Zealand dollar, continues to trade strongly versus its rivals.
'There has been significant foreign interest, particularly out of China, but right across the world,' Key told Dow Jones Newswires and The Wall Street Journal in an interview.
'We think one of the reasons why the Aussie dollar and New Zealand dollar are so strong is the foreign interest in the securities market.'
That demand from Beijing for New Zealand's bonds likely won't slow down anytime soon and will help the country to rebuild the city of Christchurch which was rocked by earthquakes in 2010 and 2011.
'China is going to be a significant player in that market for a long time to come. They have huge reserves, they are looking to diversify,' the prime minister said.
Key did say he is worried about the strength of the New Zealand dollar and its impact on exporters and tourism.
Any near-term weakness in the commodity currency is unlikely given the woes in Europe and slow economic recovery in the United States, said Key.
The New Zealand leader said the country's credit ratings should be secure for now, barring the arrival of a major global shock. His government isn't forecasting a new global recession and is determined to return a budget surplus in the 2014 to 2015 fiscal year, Key said.
'The government is totally committed to try hit that target,' said Key, but he added the government has leeway to ease fiscal policy if hit by a new recession.
Key said the level of demand from offshore buyers is a major reason why the New Zealand dollar, continues to trade strongly versus its rivals.
'There has been significant foreign interest, particularly out of China, but right across the world,' Key told Dow Jones Newswires and The Wall Street Journal in an interview.
'We think one of the reasons why the Aussie dollar and New Zealand dollar are so strong is the foreign interest in the securities market.'
That demand from Beijing for New Zealand's bonds likely won't slow down anytime soon and will help the country to rebuild the city of Christchurch which was rocked by earthquakes in 2010 and 2011.
'China is going to be a significant player in that market for a long time to come. They have huge reserves, they are looking to diversify,' the prime minister said.
Key did say he is worried about the strength of the New Zealand dollar and its impact on exporters and tourism.
Any near-term weakness in the commodity currency is unlikely given the woes in Europe and slow economic recovery in the United States, said Key.
The New Zealand leader said the country's credit ratings should be secure for now, barring the arrival of a major global shock. His government isn't forecasting a new global recession and is determined to return a budget surplus in the 2014 to 2015 fiscal year, Key said.
'The government is totally committed to try hit that target,' said Key, but he added the government has leeway to ease fiscal policy if hit by a new recession.
Subscribe