In a previous Briefing Paper, I discussed what is meant by an over-valued dollar and argued that the New Zealand dollar has been over-valued for much of the past decade. This has fewer benefits than assumed for consumer prices, and has costs for exporters. The graph below shows us the

Since 1985 New Zealand has operated with a floating exchange rate. Our currency is traded on the market, responding to changes in economic conditions here and around the world: subject to global events, interest rates, prices, and a range of other factors that affect the demand for our currency. In

Sharp movements in exchange rates often reflect sophisticated speculation. Is there much we can do about it? While the near parity of the Australian and New Zealand dollars got a lot of breathless attention recently, there was little analysis of why it was happening. Explaining the exchange rate depends upon the