Diminished Kiwi impacts retailers

Cameron BagrieThe drop in the New Zealand dollar from near congruence with the Australian dollar over Easter down to 88.86 cents this week has concerned consumers that retail prices might increase to compensate, but ANZ chief economist, Cameron Bagrie, said consumers shouldn’t expect to see immediate changes.

According to retail experts, retailers are more likely to be affected in the near term after the fall of the kiwi dollar, but consumers are unlikely to see drastic changes to prices.

“When the New Zealand dollar went rocketing up near parity we didn’t see the price of Australian products come down by 10 per cent so the fact that it has now corrected and probably then some, you just have to be careful about drawing a long bow and expecting big turbo-charged price rises from day one,” Bagrie said.

“It’s still early days because the product in the shops today will have been bought when the New Zealand dollar was a lot higher than it is today, so it will be another six or 12 months before the economic impact starts moving into the system.”

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