24 Sep 2011

NZ dollar tipped to stay volatile

6:01 am on 24 September 2011

Bank of New Zealand chief economist Tony Alexander says the value of the New Zealand dollar will be volatile for the next few years.

The dollar has fallen by almost four cents against the American currency in the past two days.

At 4.50am on Saturday, it was buying just over 0.77 US cents.

With no end in sight for the world's economic woes, Mr Alexander says the value of the kiwi will continue to fluctuate for days, months and years to come.

He says fears of a recession in Europe and the United States have prompted investors to sell assets like the New Zealand dollar.

Mr Alexander says the United States could take decades to get its accounts into order.

He says Greece will inevitably default on its debt repayments, requiring the recapitalisation of banks in France and Germany.