Alternatives to meddling with exchange rate

Meddling with the exchange rate isn’t a panacea for the world’s woes, Employers’ and Manufacturers’ Association chief executive Kim Campbell says.

He says many of the factors influencing the dollar’s values are largely out of our control.

“The things that are in our control include re-examining how central and local government can avoid adding to inflationary pressures,” says Mr Campbell.
Examples are:
* Freeing up the supply of land at local government level to make building a house more affordable.

* Ensuring tax policy takes account of its impact on monetary policy. For example, any new government spending should be assessed for its impact, both short-term and longer term, on inflation.

* Introducing a Regulatory Responsibility Act to improve the quality of regulation.
* Reducing government and private sector debt where appropriate (high debt drives up interest rates as lenders demand a risk premium) – we need to stay the course.

These are far more likely to help and less likely to have nasty consequences than meddling with the exchange rate.

 

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2 Responses to Alternatives to meddling with exchange rate

  1. Gravedodger says:

    New Zealand Last/Winston First leader would not be able, even should he wish to, understand the content of your Post but the Idiot Parker is didplaying considerable opportunism with his “me too” antics.
    Well said.

  2. Bulaman says:

    If we had a governemt that “balanced” its books ie it only spends the tax take we remove the crown from the overseas money market. Our currency becomes a LOT less attractive without a government guaranteed repayment. To get the crown out of the offshore money market they can..
    Print money…catastrophically bad idea
    Cut the public service costs. Very good idea but needs to address inflated salary levels as a first priority. Over paying public servants has the negative impact of attracting the people (to a safe cushy number) we need in private enterprise. Stop the borrowing and the exchange rate will fall!

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