New Zealand’s Key Says Intervention Won’t Turn Currency Around

New Zealand Prime Minister John Key said intervention won’t change the direction of the currency, less than a week after the central bank said it had sold the nation’s dollar to take the tops off rallies.

“If you are asking me whether I believe intervention turns around the direction of the currency, it definitely does not,” Key told reporters in Wellington today.

Governor Graeme Wheeler last week said the central bank had intervened in the currency, without disclosing details on the timing or the amount. He earlier described the New Zealand dollar as “significantly over-valued” and “problematic” for companies operating in international markets.

The currency fell 2.7 percent last week, its biggest weekly decline this year. It bought 83.10 U.S. cents at 5:15 p.m. in Wellington.

The central bank has kept the official cash rate at a record-low 2.5 percent since March 2011. It acts independently of the government and has the legal right to intervene, said Key.

“They’ve done that before and if they deem that to be the point at which under their rules it makes sense, then yes,” Key said, when asked whether he supported the action.

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