In this section
Offers for readers
The comment stream
- 1 of 31930
- 1 of 437
Currencies news stream
- Bernard's Top 10 at 10 63
- This could go 2 ways 58
- 90 seconds at 9 am: Rates flatten 47
- 90 seconds at 9 am: Dairy prices up 30
- Fonterra cuts payout forecast 60c/kg 30
- 90 seconds at 9 am: Filling their boots 30
- While you were sleeping: Oil sinks as OPEC holds 28
- Economy just too strong to allow interest rate cuts 25
- 90 seconds at 9 am: More oil turmoil 22
- China wants to extradite corrupt officials living in NZ 20
- Bernard's Top 10 at 10 63
- What happened Friday
- What happened Monday
- Oil rout intensifies 1
- NZ GDP rises 1.0% in Sept qtr 7
- What happened Thursday 1
- Fed will bide their time with rate hikes
- 90 seconds at 9 am: Wall Street rallies
- Treasury forecasts deficit in 2014/15 10
- Markets wind down & liquidity dries up
PM Key says Japan money printing and currency wars a risk for NZ, but NZ unable to respond as money printing wouldn't devalue NZ$. Your view?
By Bernard Hickey
Prime Minister John Key has acknowledged concern about the Bank of Japan's announcement of unlimited money printing and the risk of currency wars globally.
But he says there is little New Zealand could do because any move towards money printing here would be unlikely to drive the New Zealand dollar lower.
"Of course that's a concern if people are engineering a lower exchange rate through effectively fiscal easing policies," Key told a post-cabinet news conference in Wellington when asked about the Japanese move.
"But what can NZ do about that? Any country that embarks upon printing money has to think through the ramifications of that," Key said.
The Bank of Japan yesterday announced plans for unlimited money printing to buy government bonds from next year in an attempt to drive the yen lower and boost exports. Bundesbank President Jens Weidmann warned this could trigger competitive devaluations that some have termed 'Currency Wars'.
"In the case of Japan they've had very low levels of inflation and that hasn't been their problem for a very long period of time," Key said.
"I still think from NZ's perspective we're on the right path. Printing money wouldn't necessarily see a devaluation of our exchange rate," he said.
Key pointed to a series of interest rate cuts in Australia had not led to a lower Australian dollar.
"Their exchange rate has appreciated, not depreciated. There isn't necessarily a straight correlation. In the US there's been a lot of different factors driving that," he said.
"In the end it's (currency wars) a risk. It sits in that whole basket of issues, which is that the global economy is still not fully healed," he said.
"That's one of the risks we face, that the US can't deal with its fiscal cliff issues, or there's problems in Europe or Asia. We're in better shape than we probably were at the beginning of 2012 globally, but we're not out of the woods."