John Key MP National Party Deputy Finance Spokesman

05 November 2003

Cullen's No Currency Speculator

National's Deputy Finance spokesman, John Key, is calling on Finance Minister, Dr Michael Cullen, to resist temptation to intervene in the exchange rate market.

At Finance & Expenditure Select Committee today, Dr Cullen said that the Government was "not without options" to address the rapidly rising exchange rate.

"While there is concern about the impact that a rising exchange rate is having on our exporters, Dr Cullen's options are very limited," Mr Key says.

"Dr Cullen should be well aware that various countries have tried, and failed, for years to control exchange rates via direct intervention, including Japan which has massive reserves to draw on.

"Rather than meddling with the exchange rate, Dr Cullen should be turning his focus on Government policies that are adding costs to business, like OSH, ACC, Kyoto and the RMA," says Mr Key.

"He should be reeling in talk of Union-friendly changes to the Employment Relations Act and dumping the looming election bribe of an extra week's paid holiday.

"The business sector might have been able to carry some of those costs, albeit reluctantly, when the exchange rate was down at 40 US cents. But those expenses become unbearable with an exchange rate at 60 US cents.

"When it comes to currency speculation, Dr Cullen is no George Soros, and I hope he knows it," says Mr Key.

Ends

© Scoop Media