Currency Exchange Rates

New Zealand Currency Exchange Rate

The New Zealand Currency Exchange Rate

New Zealand Currency Exchange Rate

New Zealand, like other countries, uses the dollar as its currency. Like the dollar in other countries, the New Zealand Currency Exchange rate can be broken down into one hundred cents. The New Zealand dollar is also circulated as currency in the Pitcairn Islands, Niue, the Cook Islands and Tokelau. It is usually abbreviated as NZ$, to keep it from getting confused with the dollar currencies used in other countries. New Zealand adopted the dollar based currency system in 1967 when it decided to use a decimalized currency to replace the pound system it had been using.

There are a number of factors that can affect the New Zealand currency exchange rate.

New Zealand Currency Exchange Rate

Currency, just like almost everything else, is victim to the laws of supply and demand. When a currency is in higher demand, its value goes up. When the demand for that currency drops, so does the value of the currency itself.

International Trade is another major factor to the rise and fall of the New Zealand currency exchange rate. If someone in America buys something that is made in New Zealand, the money spent on the product must be converted into New Zealand's currency before the profit rate can be factored. If there is a great demand for New Zealand based products, then the value of the New Zealand dollar will go up.

Recently, the New Zealand currency exchange rate has been dropping in value because there is a slowing down of the housing market in that country. Bank interest rates have also been rising and less people are buying houses. With people spending less money on goods and housing in New Zealand, the value of the New Zealand dollar has dropped recently.

The good news is that, while the value of the New Zealand dollar has dropped, the government bonds have stayed the same.

New Zealand has spent the last two years in a state of shift as it changed from an economy that had to depend on the British market, to a free market economy. This came with the shift from an agrarian culture to an industrialized one. Because the New Zealand economy is known for its resiliency, the government is not worried about the drop in the value of the New Zealand dollar.

The government is relaxed because while many factors that contribute to whether the currency of a country rises or falls in the global market, one thing is for sure: what drops in price today could very well skyrocket in price tomorrow. The New Zealand dollar can recover from its recent price drop.

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