The big gamble

The reaction to the request from the Reserve Bank to gamble taxpayer money on the exchange rate has been almost universally negative except for Winston Peters which should wanr people off.

National’s Deputy Finance Spokesperson, John Key, knows a wee bit about this area, in his former (and very successful) role as global head of foreign exchange for investment bank Merrill Lynch. With NZ having foreign reserves of $3.5 billion, and a daily FX turnover of $1.5 trillion (of which around $1.5 billion is NZ currency) one can see why he calls the proposal “about as effective as a popgun in a bank robbery”.

But hey not enough Cullen gambles $10 billion on the Cullen Fund – lets also play with our foreign reserves also.