Key: High dollar good

Last updated 09:15 26/02/2013
John Key
JOHN KEY: "For a lot of New Zealand consumers, their life's actually a lot better because of the strong dollar."

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Prime Minister John Key says the high Kiwi dollar improves the lives of many New Zealanders, despite it being cited as a reason behind job cuts.

The high value of the currency, even dubbed by a market analyst in the US as "the new gold", was "not a one-way street", Key told TV3's Firstline this morning.

"For a lot of New Zealand consumers, their life's actually a lot better because of the strong dollar.

"You can either buy things at imported inflation, petrol's cheaper. It's not a one way street. Even for a lot of manufacturers, it's a big help."

He told Firstline the dollar becoming more popular with international currency investors was a signal the economy was doing well.

Brian Kelly of Shelter Harbor Capital told CNBC he was eyeing the kiwi because he expected it to stay strong.

 "New Zealand can't do anything about devaluing their currency," he told CNBC.

"It's a small enough market where you can get a lot of people running towards the door if there is a currency-denting stimulus move."

Key's comments on the dollar follow a raft of companies announcing job cuts or potential redundancies this year.

Almost 200 jobs would go at Summit Wool Spinners in Oamaru and about half the 400-strong workforce at Mainzeal faced redundancy after the construction firm was put into receivership.

Power company Contact Energy also announced it was to shed 100 of its 1100 staff.

Manufacturing companies told an Opposition-initiated inquiry the high New Zealand dollar was curbing investment and harming profits.

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