By Ally Mullord
The Kiwi dollar is at its highest in three years, after news from Fonterra of a record dairy payout and speculation a Chinese fund may buy New Zealand bonds.
3 News business editor Michael Wilson joined Firstline to discuss why, when our economy is meant to be in trouble, most forecasters expect the dollar to go above its February 2008 post-float high.
Mr Wilson says that while the New Zealand economy is flat, the country isn’t doing too badly on an international scale – it’s only Australia that we’re not doing as well as.
"Our currency's quite low relative to Australia's currency, so you could say that we think we're in a bad situation, but when you compare us to many other countries we're actually doing reasonably,” he says.
The high dollar is making life difficult for New Zealand exporters – even if overseas sales are strong, profits drop after conversion back to the high Kiwi dollar.
"When they convert that money back [from US or UK currency] I think their profit margins would be next to nothing," Mr Wilson says.
Watch the video for the full interview
3 News