Reserve Bank Governor Alan Bollard says there must be ways to incentivise better exchange rate practices and put boundaries on what is accepted behaviour, during a presentation in which he noted the effects of foreign central bank quantitative easing on the New Zealand dollar.
Bollard floated the idea of having the World Trade Organisation act as a potential supervisor of exchange rate practices, BusinessDesk reports at NZHerald:
Central banks that have embarked on quantitative easing have "clearly been having an effect on capital flows and exchange rates in other countries," including New Zealand where the kiwi dollar has stayed persistently high since the 2008 global financial crisis, Bollard told an academic audience in Wellington.
"There must be ways we could incentivise better exchange rate practices in countries and put boundaries on acceptable behaviour," Bollard said.
Though he didn't have any magic solutions, Bollard floated the idea of the WTO as a potential supervisor to "look at the economic conditions and exchange rate behaviour" to improve the global currency framework.