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Kiwi dollar higher than govt expected - FinMin
Reuters - Monday, October 5
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* Kiwi higher than expected
* NZ interest rates to stay low for longer vs Australia
* Kiwi falls after English comment but recovers quickly
WELLINGTON, Oct 5 - The New Zealand dollar <NZD=> is higher than would be expected at this point in the economic cycle, Finance Minister Bill English said on Monday, sending the currency briefly lower.
"The New Zealand dollar is at a level which is higher than we were expecting at this part of the cycle," he told CNBC television in Hong Kong.
The government and policymakers have repeatedly said the strong kiwi is not helpful for the country's exports, but that it is also a reflection of the weaker U.S. currency.
The kiwi <NZD=> briefly fell around 15 basis points to a session low of $0.7140, before recovering its losses.
The kiwi has risen close to 50 percent since hitting a six-year low in early March, thanks partly to a string of positive news pointing to a gradual recovery in the economy.
New Zealand emerged from its longest recession on record in the second quarter, after posting meagre 0.1 percent growth.
English also said New Zealand's interest rates were likely to remain low when compared with neighbouring Australia.
"Our interest rates are likely to be lower for longer than for instance Australia, where the RBA (Reserve Bank of Australia) has already signalled might go up," he said.
The central bank has cut interest rates to a record low 2.50 percent, and pledged to keep them there or lower until the latter part of 2010 to help the economy. It is expected to leave rates unchanged at its next review on Oct. 29, according to a Reuters poll. [NZ/POLL]
The Australian central bank holds its October policy meeting on Tuesday and most analysts expect it to keep rates at 3.0 percent [AU/INT], though two influential economic columnists say the bank is likely to raise rates to 3.25 percent.
English is meeting investors in Hong Kong and London to promote New Zealand, which relies heavily on foreign borrowing to fund its current account deficit because of low levels of household saving.
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