New Zealand only a "peashooter" in currency markets - FinMin
"We have been pretty clear we are not willing to take the kind of huge risks involved in large scale speculation on the exchange rate with tax payers' dollar," English told reporters after a parliamentary committee hearing.
The trade-weighted New Zealand dollar has risen about 11 percent since May 2012, putting a strain on the country's export sector.
English, faced with pressure from the export sector to lower the high local dollar, said countries like Switzerland had taken on big risks to manage its currency by building up huge positions on exchange rates.
"We just don't want to take that kind of risks. We are a small country," he said.
"We'll be out in the war zone with a peashooter."
English added that markets would ignore a country if it didn't have "a couple of hundred billions of US dollars" in the bank when intervening in the currency market.
"Otherwise they don't take you seriously," he said.
New Zealand's foreign currency assets stood at NZ$17.7 billion ($14.89 billion) at the end of December, with about NZ$9.1 billion readily liquefiable for intervention if needed.
That compared with Switzerland's $460 billion in November, according to IMF data.
The New Zealand dollar has gained around 1.5 percent so far this year, having touched a 19-month high of $0.8492 earlier this month. It was last around $0.8410.
"It does represent a fundamental strength of
Be the first to comment.