Problems relating to Trade and Investment on New Zealand
12. Exchange controls |
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Issue |
Issue details |
Requests |
Reference |
(1) Exchange Instability/NZ$ Appreciation | - Export sales and revenue is largely affected by fluctuations in the foreign exchange. Recently, NZD has maintained strength more than ever before against USD, including also Japanese Yen. - A large margin of foreign exchange fluctuations makes sales and profit control difficult. - Radical exchange fluctuations prevail. As it stands, member firm's subsidiary (MFS) benefits from exchange gain on a direct export transaction in yen. Nevertheless, negotiation for raise in price is difficult. In a transaction between related parties, the prevailing Yen depreciation enables MFS to offer special prices to its customers. However, MFS runs on a thin margin, so that if the exchange rate swings toward appreciation of Yen, it will instantly show operational loss: such is the severity of the fluctuation band. |
- Stability in foreign exchange is more desirable to enterprises. - It is requested that GOP takes step to: -- stablise foreign exchange fluctuations, and -- holds the fluctuation band within a few percents in 6-months. |
- Finance Related Legislation |
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