NZ dollar drops, petrol price rises

A strong US dollar has driven the New Zealand dollar to a 30-month low, raising the cost of imported goods.

Kiwis will get 64 American cents for each New Zealand dollar, the lowest since 2016, with the main driver being rising American interest rates.

Mike Shirley, Kiwibank Financial Markets Senior Dealer, said "the exchange rate is adjusting to reflect the fact a US dollar generates a higher return now than a NZ dollar".

While that might be good news for exporters, considered the engine room of our economy, imports are becoming more expensive  and that includes petrol.

"Anything that we import into the country, whether that's a flat-screen TV or petrol, can become more expensive," said Mr Shirley.

Mark Stockdale, AA Principal Advisor of Regulations, said that will frustrate motorists who are already feeling attacked by the Government's fuel taxes.

"We've got a falling NZ dollar, we've got rising commodity prices, and we've got increased government imposed taxes," he said.

Kiwis are feeling that pinch, with many saying it is becoming difficult for people on the minimum wage to keep up.

Finance Minister Grant Robertson said the US dollar has risen against most global currencies, which has pushed the price of oil up for those countries, as it is priced in US dollars.

"This has also been driven by economic developments in the US, rather than New Zealand . We have just experienced the strongest growth in our economy in two years," said Mr Robertson.

He also said New Zealand's dollar was at about the same rate with Australia as it was a year ago.