RBNZ statement – “why climate matters to RBNZ”

Well, this is a sensitive subject, so I’ll leave it to those interested to check this with the Reserve Bank of New Zealand:

This is a speech by RBNZ Governor Orr.

The relevance to the financial system and central banks as part of this is best summed up in this from Orr:

  • The past few months have seen no shortage of extreme weather events linked to climate change across the world, with record high temperatures and droughts. Here in New Zealand, last year set a new record for weather-related insurance payouts, and this year is set to break the record.
  • Assessing material risks for banks and insurers, as well as for the financial system as an ecosystem, is our core business. Financial stability is best maintained when all relevant risks are identified, priced and allocated to those best able to manage them. To achieve our objective of financial stability, it is important for us to take into account the current and future impacts of climate change.

—-

NZD

NZD

The New Zealand Dollar (NZD) is the official currency of New Zealand and the tenth most traded currency in the world. Also called Kiwi, the currency is also used in several Pacific islands including Tokelau, Cook Islands, Pitcairn Islands and Niue. The history of NZD is long and dates back to 1934 with the establishment of the Reserve Bank of New Zealand. . Although far from being the most traded currency in the global forex market, the NZD still plays a key role. The NZD is considered a carry currency as it is a relatively high yielding currency. Traders typically buy NZD and fund it with a low-yielding currency such as Japanese Yen (JPY) or Swiss Franc (CHF). What factors affect the NZD? Compared to the US dollar or British pound, the NZD can be much more volatile and dependent on external economic stress or turbulence. Investors with a risk appetite often buy the currency, while fears and market crises put negative pressure on the NZD. There are also several factors that can specifically boost the NZD in the forex market. This includes dairy prices, as New Zealand is the largest exporter of whole milk powder in the world. A rise in milk prices can lead to spikes in the NZD. By extension, tourism figures are also important for NZD. This is due to the fact that New Zealand depends on tourism as a significant proportion of its economy. Tourism growth would indicate a higher NZD, and vice versa.

The New Zealand Dollar (NZD) is the official currency of New Zealand and the tenth most traded currency in the world. Also called Kiwi, the currency is also used in several Pacific islands including Tokelau, Cook Islands, Pitcairn Islands and Niue. The history of NZD is long and dates back to 1934 with the establishment of the Reserve Bank of New Zealand. . Although far from being the most traded currency in the global forex market, the NZD still plays a key role. The NZD is considered a carry currency as it is a relatively high yielding currency. Traders typically buy NZD and fund it with a low-yielding currency such as Japanese Yen (JPY) or Swiss Franc (CHF). What factors affect the NZD? Compared to the US dollar or British pound, the NZD can be much more volatile and dependent on external economic stress or turbulence. Investors with a risk appetite often buy the currency, while fears and market crises put negative pressure on the NZD. There are also several factors that can specifically boost the NZD in the forex market. This includes dairy prices, as New Zealand is the largest exporter of whole milk powder in the world. A rise in milk prices can lead to spikes in the NZD. By extension, tourism figures are also important for NZD. This is due to the fact that New Zealand depends on tourism as a significant proportion of its economy. Tourism growth would indicate a higher NZD, and vice versa.
Read this term/USD update:

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