It's three weeks since I last commented on how global markets were impacting on Pingar's evolving Business Plan. How times have changed. Then I thought 'sub-prime' was a cheap cut of meat. Now I know better.
Today, battered currency markets are intently watching to see what happens to the New Zealand dollar as a wave of foreign held securities denominated in New Zealand dollars matures. Three weeks ago, the NZ dollar was hovering around 80 US cents a NZ dollar. Today we are back to around the 70 cents mark. In terms of export earnings, that makes a massive difference to the bottom line.
Helen Clark, New Zealand's Prime Minister, said this morning that the NZ economy was a 'cork' floating around in turbulent seas. Exporters, she thought, would today be walking with a 'lighter step' given the weakening NZ dollar and the anticipated positive impact on our competitive position.
Short-term, she is probably right. Longer-term however what any business needs is a stable currency and a stable market. Today, we have neither. The next few hours, days and weeks will reveal the extent of the impact this global crisis has on the NZ economy. In red wine parlance, let's hope it does not become 'corked'.
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