# What is the deal with New Zealand's interest rates?

**URL:** <https://boards.straightdope.com/t/what-is-the-deal-with-new-zealands-interest-rates/172424>\
**Category:** Factual Questions\
**Created:** [May 1, 2003, 5:18pm UTC](https://boards.straightdope.com/t/what-is-the-deal-with-new-zealands-interest-rates/172424 "2003-05-01T17:18:30Z")\
**Posts on this page:** 2\
**Page:** 2

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**Author:** ![woolly](https://avatars.discourse-cdn.com/v4/letter/w/ebca7d/32.png) [@woolly](https://boards.straightdope.com/u/woolly)\
**Post date:** [May 2, 2003, 4:18pm UTC](https://boards.straightdope.com/t/what-is-the-deal-with-new-zealands-interest-rates/172424/21 "2003-05-02T16:18:17Z")

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> [@](#):
>
> \*Originally posted by bernse \*  
> \*\*How did that happen? What was wrong with the economy at the time? \*\*

The Kiwis were really struggling as their regulated economy stagnated, the trigger being the UK’s entry into the (then) EEC and completely changed their approach to fiscal and monetary policy, including a free-floating currency. A reasonable summary of the background and program to become a market based economy dubbed  
[Rogernomics](http://www.dba.org.nz/PDFs/New%20Zealand%20Reforms%201997.pdf) .

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**Author:** ![TaxGuy](https://avatars.discourse-cdn.com/v4/letter/t/b19c9b/32.png) [@TaxGuy](https://boards.straightdope.com/u/TaxGuy)\
**Post date:** [May 2, 2003, 6:58pm UTC](https://boards.straightdope.com/t/what-is-the-deal-with-new-zealands-interest-rates/172424/22 "2003-05-02T18:58:19Z")

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> [@](#):
>
> \*Originally posted by woolly \*  
> \*\*TaxGuy, I strongly advise that you don’t seek a career in international finance.
> 
> If you’re offering USD0.94 for a NZD, I’ll take as many greenbacks as your bank account and credit card can handle. I’ll swap them them back into Kiwis @ USD0.56.
> 
> 😛 \*\*

When I said that “the exchange rate insures that NZ dollars are worth 6% less than US dollars,” I meant (and I think this is obvious) that the real value of the NZ dollar is 6% less than the real value of the US dollar, not that one US dollar equals 0.96 NZ dollars.

Isn’t there anyone here who really knows about this stuff? I’m just kinda pissing in the wind here.

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