No currency crack down by goverment

Calls by primary exporters for the Government to crack down on currency speculators appear to be falling on deaf ears. Fuhrman and Co managing director Peter Christensen says punters speculating on the New Zealand dollar are creaming profits at the expense of meat, wool and dairy producers and the Government should focus on ways to step in and weed them out reports Rural News. "˜The Government should be intervening and putting a cap on the amount of New Zealand currency that speculators can hold. We need to clearly differentiate between productive investment in New Zealand and international speculation. Finance Minister Bill English says there are no plans to cap the kiwi dollar as New Zealand lacks the foreign reserves of countries like Singapore that put a cap on currency. However, the Reserve Bank does have the mandate to intervene in the currency market if it believes it is reaching extreme levels. A spokesman from English's office says "˜Australia's official interest rates are expected to continue rising over the next year while ours are expected to stay low until late next year. We would expect this to be reflected in the relative performances of the NZ and Australian dollars over the coming year.' Peter Crone from wool exporter John Marshall & Co predicts the dollar will go to 80c against the US currency and says that something is going to break. "˜It will reach the point where international mills will stop buying New Zealand wool and turn to other wool growing countries or move out of wool and into synthetics. Peter Christensen says "˜Wool prices paid to farmers have increased slightly on average since March. "˜But if the dollar had remained at the March levels, wool would be worth a $1 a kilogram more and increased the average woolgrowers' pay cheque by $8000 to $10,000.'