Warning over inflation and import costs as New Zealand dollar drops to lowest value against US dollar since 2020 – Newshub

The Ports of Auckland is Aotearoa's trade link to the world - vulnerable to market volatility.

But our tumbling dollar is not a concern for Aucklanders Newshub spoke to on the waterfront on Tuesday.

"Not me personally, I don't have a lot of financial happenings," one person said.

"No, it hasn't really crossed my mind at the moment," said another.

But it will likely impact their lives because a weak Kiwi dollar means importing is more expensive.

"While we do expect inflation rates to slowly fall from here, the longer the New Zealand dollar remains low, the slower it will take for those inflation rates to fall," ASB senior economist Mark Smith said.

Six months ago the New Zealand dollar was US68.9c - now it's at US56.6c, a fall of 18 percent.

Aotearoa's dollar is suffering because the US dollar is being pumped up by the US Federal Reserve lifting interest rates to tackle inflation.

"Interest rates globally are going up, and when rates are going up, generally people tend to look to where their money will be safest, and at the moment it's certainly the US economy," said Smith.

And Aotearoa's currency is not alone, the British pound took a significant hit overnight after the new Liz Truss administration announced its tax cut plan.

But Finance Minister Grant Robertson sees two sides to this coin.

"Clearly this will have some impact on imported goods coming into New Zealand, it actually has the opposite effect for exporters."

But timber exporter at Tropex Export Joe McLeod said exporters have their own set of challenges.

"We were starting to see a little bit of cost come out of the freight rates but that will quickly turn around because of the other currencies strengthening against the Kiwi [dollar]."

So, more money to be made selling our products abroad, but still more expensive to fill our shelves at home.

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Warning over inflation and import costs as New Zealand dollar drops to lowest value against US dollar since 2020 - Newshub