PM doubts options available to curb kiwi's rise

12.00pm

Prime Minister Helen Clark says there is little the Government can do to arrest the New Zealand dollar's upward trajectory.

Asked whether the New Zealand dollar's rise was out of the government's hands Ms Clark said, "It is pretty much".

In November Finance Minister Michael Cullen said the Government was looking at "options" to limit the dollar's rise.

However, Ms Clark told National Radio this morning that while Dr Cullen and Treasury were examining whether there was anything that could be done on the margins, there was in fact little New Zealand could do to combat the US dollar's dive. "No one expects the Government to perform a minor miracle over that."

With the New Zealand dollar pushing up over US68c earlier this week, National Party leader and former Reserve Bank Governor Don Brash said it was time for Finance Minister Michael Cullen to come clean on his "options" to limit the damage caused by the rising currency.

The kiwi has risen by about 3 per cent against the greenback already this year after appreciating by 25 per cent last year.

The surging kiwi's negative effect on exporters was cited as a key factor in low December quarter business confidence reported yesterday by the New Zealand Institute of Economic Research (NZIER).

A net 2 per cent of firms surveyed were pessimistic about general business conditions for the coming six months. During the past five December quarters, on average a net 9 per cent of firms were optimistic about their prospects.

While Ms Clark acknowledged "there are people who are hurting in the export community" she said the NZIER's quarterly survey of business opinion also contained some positive news.

The survey showed employment remained pretty buoyant, and a healthy proportion of firms planned to expand their business and their investment intentions were high, Ms Clark said.

This morning the New Zealand dollar had eased to US67.19c in Wellington after favourable US economic data overnight lent some strength to the greenback

- NZPA