The Reserve Bank Building in Wellington. Photo/File
Don't penalise average Kiwi
If like me you read the tiny article about the Reserve Bank paying a dividend of $430m to the Government, I'm sure you will have been as surprised as I was.
They were able to pay this dividend because of the really weak New Zealand dollar.
Now it was my belief that RBNZ controlled the value of our dollar so that our exporters could sell to overseas markets and so mortgages would be cheaper. Not so they could make an enormous profit.
Because of the weakness of the dollar we pay much more for everything we import. Fuel, cars, TVs, books, fruit, meat, you name it.
Even our local produce is affected by it. Yes, much of our primary produce is priced against what we can get for it overseas. You go overseas and your money is almost worthless. As mortgage rates went down, building prices increased, partly because imported building materials cost more (weak dollar), and largely because builders and developers increased their costs.
