21 Nov 2011

Polls unnerving financial markets ahead of election

7:12 pm on 21 November 2011

Financial market traders say a surge in support for the minor parties could have played a part in pushing up the Government's borrowing costs in recent days.

They say it reflects increasing uncertainty about the outcome of Saturday's election.

One currency dealer spoken to by Radio New Zealand says he has received a number of queries from foreign investors as the minor parties have risen in the polls.

The dealer, who did not want to be named, says the biggest fear seems to be that fringe parties could force changes to the way the exchange rate is managed.

An interest rate specialist at AMP Capital Investors, Grant Hassell, says a small increase on interest rates on government debt could reflect the election result is not as certain as it was a fortnight ago.

Mr Hassell says the Government's borrowing costs had reached record lows and have edged up as investors wait for an election result.