By BRIAN FALLOW
Finance Minister Michael Cullen was resolutely unforthcoming when MPs questioned him in the House about what he had meant on Wednesday when he said the Government was "not without options" to combat the rise in the New Zealand dollar.
Opposition leader Don Brash first asked him if he had intended to signal possible changes to the Reserve Bank Act, or changes to the floating exchange rate, or intervention in the currency market. If not, what was he hoping to achieve?
"My intention was to signal that the Government is not without options and no specific conclusions can be drawn from that statement," Cullen said - a phrase he was to use twice more. "It would be most unwise to do so."
He dodged another question from Brash about whether he was just trying to jawbone the dollar lower, by reflecting on the fact that it had ended yesterday higher despite the Reserve Bank of Australia lifting interest rates and eliminating the interest rate differential between Australia and New Zealand. This was the "irrational exuberance of financial markets" on display.
National's deputy finance spokesman, John Key, a former global head of foreign exchange for US investment bank Merrill Lynch, told the Herald Cullen's comments had been irresponsible in light of New Zealand's reliance on foreign investors' willingness to invest here or hold New Zealand dollar-denominated assets.
New Zealand is a net debtor to the rest of the world to the tune of $98 billion or 76 per cent of GDP.
Cullen dodges dollar 'options' queries
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