21 Oct 2009

Reserve Bank can do little about dollar's rise - Bollard

6:56 pm on 21 October 2009

Reserve Bank Governor Alan Bollard has told MPs there is little the Reserve Bank can do to bring down the soaring value of the New Zealand dollar.

Appearing before the Finance and Expenditure Select Committee at Parliament on Wednesday, Dr Bollard said the strength of the Kiwi against the US dollar is being driven chiefly by that currency's weakness.

He said the high value of the dollar is not necessarily an impediment to raising the Official Cash Rate to quell rising house prices.

Dr Bollard said money markets are already factoring in earlier rises in the cash rate and it was debatable whether or not this would push the dollar higher.

The New Zealand dollar on Tuesday pushed through the US75 cent barrier.