Thinking about the decline in the exchange rate

Our dollar has fallen markedly in recent days. This is illustrated in a post from Kiwiblog (*)

There are two main ways that the falling dollar impacts on New Zealanders

  1. It now requires more NZ dollars to buy goods from overseas,
  2. We now get given the equivalent of more NZ dollars for things we sell overseas.

So our export “income” will increase but the price we pay for imports rises.

So when you think about how this decline will impact on you, you need to think about your exposure to these two different facets of our trade relationship. If you are involved with an industry that exports things – this is likely to be a good time for you. If you are an avid purchaser of books on, this is not such a good time for you. Damn it – and I’m going on holiday in a month 😛