Economy – RBNZ Analytical Notes: Estimating Exchange Rate Pass-through in New Zealand

Source: Reserve Bank of New Zealand – Te Pūtea Matua

16 May 2025 – The Reserve Bank of New Zealand – Te Pūtea Matua has published two Analytical Notes;

Estimating Exchange Rate Pass-through in New Zealand (ref. https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=6162da22c5&e=f3c68946f8 )

Key findings

This Note analyses exchange rate pass-through to tradables prices in each step of the transmission channel. Estimating the short-run and long-run impacts of movements in the exchange rate on import prices and tradables prices sheds light on the inflationary impacts of such movements. 

Using a range of estimation methods, we find that a 1% appreciation in the Trade Weighted Index (TWI) for the New Zealand dollar exchange rate can lead to a 0.004 to 0.01% decline in ex-fuel tradables prices within one quarter. In the long run, it can lead to a 0.05 to 0.3% decline in ex-fuel tradables prices. These estimates of incomplete pass-through are in line with estimates obtained for inflation-targeting economies in the related literature.  
Asymmetries in exchange rate pass-through can arise in different economic environments and across time. For example, pass-through tends to be stronger when the output gap is materially positive than when it is materially negative.

Deriving Indicators of Economic Activity from Traffic Sensor Data: (ref. https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=15ef0a1d3b&e=f3c68946f8 )
Key findings

We develop monthly indicators of economic activity in New Zealand from granular data measuring traffic counts for both heavy and light traffic. Our indicators are highly correlated with New Zealand’s official measure of aggregate economic activity – Gross Domestic Product.
Our indicators can be disaggregated into regional components at a daily frequency, highlighting variation that would remain masked in aggregate measures.
These traffic indices provide an independent check on other high-frequency economic indicators, offer better monitoring of regional disparities in economic activity, and support timely policy advice in response to economic shocks. However, the higher volatility of these traffic indices means that they require careful interpretation, and these traffic indices should be used as part of a broader suite of economic indicators.

More Information
Our research and analysis: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=68e4cc931d&e=f3c68946f8

The Analytical Notes series encompasses a range of background papers prepared by Reserve Bank staff.
Unless otherwise stated, views expressed are those of the authors, and do not necessarily represent the views of the Reserve Bank.

Our research programme: https://govt.us20.list-manage.com/track/click?u=bd316aa7ee4f5679c56377819&id=eae460457c&e=f3c68946f8

Why we conduct research

In an ever-changing world, our research into different dimensions of the New Zealand economy is the bedrock enabling us to make well-informed policy decisions.
The RBNZ plays a central role in the New Zealand economy, setting monetary policy to support price stability, and acting as kaitiaki (guardians) of the financial system. To achieve our mandate, we draw on a comprehensive body of research into the New Zealand economy, which asks big questions ranging from how individual firms set their prices to what the future of money will look like in Aotearoa. Our researchers use advanced statistical techniques and macroeconomic modelling to unravel the intricate relationships between businesses, financial markets, and people that shape the New Zealand economy.
The insights from our research provide us with the understanding and confidence to make appropriate policy decisions for the benefit of New Zealanders, and also equip us to respond to future shocks.

Progress on Hawke’s Bay Expressway good news for growth

Source: NZ Music Month takes to the streets

Minister of Transport Chris Bishop has welcomed funding to proceed with groundwork and geotechnical investigations for the next section of the State Highway 2 Hawke’s Bay Expressway Road of National Significance project.

“The expressway is a vital link for the whole region and for road users from neighbouring regions. Progress on the next section of the project – which will better connect Napier to Hastings and increase growth and productivity – is good news for a region with massive economic potential but which is still recovering from Cyclone Gabrielle.

“NZ Transport Agency’s board has confirmed $7.65 million for the work, which will enable the project team to begin early ground improvements alongside Ngaruroro River Bridge and geotechnical investigations in section 2 of the project,” Mr Bishop says.

“This funding will make more efficient and reliable travel another step closer.

“When that work begins, crews will repurpose safe, tested silt from the aftermath of Cyclone Gabrielle, provided free by Hastings District Council to raise the level of the land and create a wide, flat surface – just like the work already completed alongside Tutaekuri River Bridge and the Kennedy Road overpass. 

“That silt will then be left to settle for 12 months prior to additional construction work starting, subject to further approvals, consents and funding.

“The latest funding will also allow geotechnical investigations at Ngaruroro River Bridge and other locations. Geotechnical investigations are really important for this project – they help to determine the detailed design.

“Work is well underway onsite within the first section of the project, and on the detailed design work needed for that first section. Section 1 of the project focusses on Taradale Road to Pākōwhai Road, which has been identified as the most congested section of the expressway.

“I’m confident that by starting early groundwork and investigations for the next part of the project soon, we can get section 2 shovel-ready for main works construction, pending further approvals and funding by the NZTA board.  

“I know how important this project is to get commuters and freight moving through the region more quickly and more safely.” 

While this funding allows NZTA to get on with section 2 investigations and ground conditions, an investment case is in development for the remainder of the project (including section 2 improvements), which will determine decisions on next steps.

Notes to Editor:

·                Section 1 of the project spans from the Taradale Road to Pākōwhai Road roundabouts.

·                Section 2 of the project stretches from Pākōwhai Road to York Road roundabouts in the south and Taradale Road to Prebensen Drive roundabouts in the north. 

·                Prebensen Drive to York Road is the busiest stretch of the expressway, with the most problematic intersections, and it connects the main urban areas of Napier and Hastings. 

·                Construction of the main works on section 1 are expected to start in late 2025, subject to consents and funding, and be completed in late 2027.

·                An investment case is in development for the remainder of the project (including section 2 improvements). This Corridor Investment Case will be completed later this year, and a decision will be made on whether to proceed to detailed design

Walking together: Council, mana whenua and community deepen conservation relationships online

Source: Secondary teachers question rationale for changes to relationship education guidelines

When you visit the newly updated Tiaki Tāmaki Makaurau | Conservation Auckland website, you’re stepping into more than just a page of information; you’re entering a space where mana whenua provides guidance for community conservation within their rohe (tribal area).

It’s a powerful reminder that protecting the environment in Tāmaki Makaurau isn’t just a technical task, it’s a deeply cultural, ancestral and collaborative journey.

This important addition to the website marks the latest chapter in an evolving partnership between Auckland Council and mana whenua.

An Auckland Council Senior Community Advisor, Sandra Jack, says we’ve always known caring for the environment is about relationships.

“The new content makes it easier for people to connect with mana whenua and understand their role as kaitiaki while supporting our shared conservation goals.

“This journey recognises mātauranga (knowledge), not as an add-on, but as a foundation pillar for environmental stewardship.”

The content wasn’t created in isolation. It was co-designed with the Interim Mana Whenua Engagement Forum, with guidance from representatives Gavin Anderson (Ngaati Whanaunga) and Adrian Pettit (Te Ākitai Waiohua).

The result: a more authentic reflection of iwi values, bringing to life stories of place, practices of care and the wisdom of generations.

“Kua eke te wā, me noho mātāmua ko te whakaaro nui ki te Taiao i ngā mahi katoa.

“No longer will things happen without consideration of the impact within te taiao,” (nā Hokimai-Anahera Rosieur, Ngāti Manuhiri).

Samantha Hill, General Manager of Environmental Services, sees the website as more than a communications tool.

“This project has given us an opportunity to respond to mana whenua aspirations, learn from mana whenua and be trusted to safely share the knowledge with the wider community,” she says.

“This isn’t just about a website—it’s about how we work together,” Sandra adds.

Highlights of the initiative include relevant information on iwi of the region and how to engage with them, new imagery celebrating te taiao (the natural world), the integration of Te Haumanu Taiao tohu (emblem) of restoration and care and richer explanations of kaitiakitanga (the spiritual and cultural environmental practices).

In a world where people are increasingly aware of our environmental impact, this collaboration offers a way forward. It shows what’s possible when relationships are built on trust, respect and a willingness to partner. Mana whenua, council and community are united in care for the whenua and future generations.

For more information visit the Tiaki Tāmaki Makaurau website. 

Officer stops thieves in their tracks

Source: New Zealand Police

A group of offenders were no match for one Sergeant during a foot pursuit in Manukau.

In the process, thousands of dollars in products that had just been stolen was recovered.

Around 4.30pm on Wednesday, the on-duty Sergeant was conducting prevention patrols in the Manukau Westfield carpark, when a group of young people were seen running from the mall carrying handfuls of clothing.

“The officer saw the youths running and being pursued by mall security and a few other people,” Counties Manukau Area Prevention Manager, Inspector Warrick Adkin says.

“He quickly parked his patrol car and started to give chase as well, following the alleged offenders onto Ronwood Ave.”

Once there the group took the opportunity to board a stationary bus in the hopes of making a swift exit, however the pursuing officer was only one step away.

“Our Sergeant has boarded the bus right after them and managed to herd eight or so into the back, preventing their escape,” Inspector Adkin explains.

The officer kept all the alleged offenders contained until back up arrived and could give him a helping hand.

Inspector Adkin says quick thinking and an impressive running pace, resulted in the recovery of over $2500 worth of clothing, and around $300 worth of cosmetics from varying retailers.

The young people, all aged between 10 and 15 years, were all apprehended and the loot was returned to the stores.

All have been referred to Youth Aid.

ENDS.

Amanda Wieneke/NZ Police

Eyes in the sky assist in locating missing man

Source: New Zealand Police

Police wasted no time taking to the sky following a concerning call from a member of the public whose father suffering from dementia had gone missing.

Just before 1am, Police were informed of man in his 80s with dementia who had gone missing in the Ōrere Point area.

Counties Manukau South Area Prevention Manager, Inspector Matt Hoyes says the man hadn’t been seen for several hours and Police had several concerns for his wellbeing.

“The information we received indicated several risk factors, including his limited mobility and the fact he was unfamiliar with the surrounding area, which backs onto Ōrere Point Beach.

“Given the remote location, the Police Eagle helicopter was promptly deployed to assist in the search.

“Eagle quickly got up and was very quickly able to locate the missing man in the nearby bush area.”

Inspector Hoyes says tactical flight officers aboard Eagle guided the informant to his father’s location just prior to ground staff arriving.

“Eagle’s prompt response to this incident was no doubt instrumental in ensuring this man was located swiftly and safely.

“This was a great example of multiple Police resources working together for the greater good, it’s not always about apprehending offenders, a huge part of our role is looking out for one another.”

ENDS.

Holly McKay/NZ Police

NZ to host Pacific leaders

Source: NZ Music Month takes to the streets

New Zealand will host leaders from across the Pacific next week, Deputy Prime Minister Winston Peters and Pacific Peoples Minister Dr Shane Reti have announced.

“New Zealand is a Pacific country, and regular face-to-face dialogue is a crucial underpinning for our relationships throughout our region,” Mr Peters says. 

The Secretary-General of the Pacific Islands Forum Baron Waqa will visit New Zealand, engaging with Mr Peters and Dr Reti, Prime Minister Christopher Luxon, Climate Change Minister Simon Watts and a range of MPs from across Parliament.

“New Zealand’s membership of the Forum underpins much of our engagement in the region,” Mr Peters says. 

“Secretary-General Waqa’s visit will be an opportunity to discuss the Forum’s work on regional priorities, including health, education, security, and the environment.”

Ulu o Tokelau Esera Tuisano will make his first official visit to New Zealand, ahead of New Zealand and Tokelau marking a centenary of their constitutional relationship next year.

“New Zealand and Tokelau have enjoyed close ties for nearly a century. We are united by our shared New Zealand citizenship and mutual obligations and responsibilities,” Mr Peters says.

New Zealand will also host the Council of the University of the South Pacific in Auckland on 19-21 May. The meeting brings together 12 Pacific countries to guide the direction of the leading tertiary provider in the Pacific. 

“Our role as host reflects our steadfast commitment to advancing tertiary education and research through Pacific regionalism,” Dr Reti says.

Mr Peters will also meet with Tuvalu Deputy Prime Minister and Finance Minister Panapasi Nelesone. He will reaffirm New Zealand’s commitment to supporting Tuvalu’s development priorities, including economic resilience.

DOC reopens lower Hooker Valley Track

Source: Police investigating after shots fired at Hastings house

Date:  16 May 2025

“We know how much this iconic walk is valued and how much people love to visit and walk it, so we’ve worked hard to keep the lower part of the track open,” says Aoraki Mount Cook Operations Manager Sally Jones.

“There is an elevated viewing site looking over Mueller Lake and visitors can still walk up the stunning Hooker Valley past the first suspension bridge which is about an hour’s return from the carpark at White Horse Hill.

“We will have to keep the upper part of the track closed while the construction takes place as there are helicopters carrying big loads flying overhead. It’s a worksite and keeping people safe is our number one priority.”

Sally Jones says the well-known track to Kea Point is also still open and visitors can enjoy the iconic views of Aoraki and other mountains close by.

“Kea Point is not as popular, but the views are just as spectacular as the Hooker Valley. For those who with the skills and fitness seeking a more challenging walk, there is also the trek up to Sealy Tarn, to Mueller Hut and the walk up to the Tasman blue lakes.”

Work is underway to get the Hooker Valley Track fully open. Once built, a huge new suspension bridge will span 189 metres across the river. It will replace an older bridge which had to be closed last month due to riverbank erosion near the bridge supports.

DOC contractors have been on site to block off access to the old bridge and to keep visitors away from what is now a construction site and must be treated as such.

Construction work will continue for the rest of this year, and it’s hoped the new bridge will be open by next Autumn.

“It’s a huge and challenging project and will be a tourist attraction in its own right,” says Sally Jones.

The cables that will be flown in are massive and the whole thing will be spectacular to watch. We can’t wait until it’s open.”

Incredible landscapes, nature, and cultural heritage make Aoraki Mount Cook one of the top two most popular national parks in Aotearoa (alongside Fiordland). It attracts over a million visitors a year and is on the itineraries of about 21% of international visitors.

Map of the current closures on the Hooker Valley Track

Contact

For media enquiries contact:

Email: media@doc.govt.nz

$577 million to support film and TV production

Source: NZ Music Month takes to the streets

The Government is providing certainty to New Zealand’s film industry by providing the funding needed to sustain the International Screen Production Rebate, Economic Growth Minister Nicola Willis announced today.

“This funding will help bring investment, jobs and income to New Zealand, boosting our economic growth. 

“We are sending a clear message to the world: New Zealand is the best place in the world to make movies.  Bring your productions here to take advantage of our talent and locations. 

“The Budget increase of $577 million across this year and the next four takes total funding for the rebate scheme to $1.09 billion over the forecast period, better reflecting expected demand for the scheme. Settings remain unchanged,” Nicola Willis says. 

“The rebate scheme is working and we want New Zealand’s film industry to know the Government is backing them to grow into the future. 

“At last count our screen sector provided work for about 24,000 people and generated about $3.5 billion in annual revenue. 

“While industry incentives are not generally our favoured approach, the reality is we simply won’t get the offshore investment in our highly successful screen sector without continuing this scheme,” Ms Willis says.

“New Zealand competes with more than 100 territories world-wide that provide screen incentives, including countries like Australia, Canada and the United Kingdom that provide more generous incentives than ours.

“Eligible productions can access a 20 per cent cash rebate on qualifying New Zealand production expenditure where production costs are more than $15 million for feature films and $4 million for TV productions.

”A further 5 per cent rebate is available to productions spending more than $30 million which meet additional criteria for industry and economic growth.

“Inbound productions invested nearly $7.5 billion in New Zealand in the past 10 years, supported by $1.5 billion in rebate payments.

“Following a review of the rebate settings completed in late-2023, 10 big international productions have been attracted here, including eight from the major Hollywood studios. They include A Minecraft Movie, the second highest-grossing film of 2025 so far, and Taika Waititi’s Klara and the Sun now in production.

“Along with investment and jobs, New Zealand has benefited from acquiring a highly skilled screen industry workforce. Film production companies provide work for thousands of people and create fantastic opportunities for young New Zealanders.

“The Government will continue to work with the New Zealand Film Commission to ensure we continue to attract high-value productions from around the world.”

Notes for editors

  • Through Budget 2025, the Government is increasing baseline funding for the New Zealand Screen Production Rebate – International so it better reflects current forecast demand for the rebate.
  • Previously the Government was regularly called on to provide time-limited funding on top of baseline funding for the scheme.
  • The changes mean that funding for 2024/25 is increasing to $250 million, and to $210 million from 2025/26 onwards, which better reflects the expected costs of the rebate based on registered productions and current forecast demand.

Te Pāti Māori Condemns Fast-Track Approval of Seabed Mining

Source:

Te Pāti Māori is gravely concerned by the Government’s approval of the Trans-Tasman Resources (Taranaki VTM) seabed mining project under its fast-track regime. This marks the first time a commercial shallow seabed mining operation has been approved anywhere in the world- pushed through with no transparency, no public input, and no consent from tangata whenua.

“This project will extract 50 million tonnes of seabed every year, dumping millions of tonnes of sludge into the moana for 35 consecutive years,” said Te Pāti Māori co-leader and MP for Te Tai Hauāuru, Debbie Ngarewa-Packer.

“Iwi, hapū, whānau, and local government have spent over a decade fighting to stop this destructive proposal- winning in the highest courts of the land.

“The approval hasn’t come because it’s safe or supported. It’s been enabled by a fast-track process that gives unchecked power to Ministers and shuts out those most affected.”

Te Pāti Māori acknowledges the tireless efforts of iwi, environmental protectors, legal experts, scientists, divers, and everyday New Zealanders who have stood up for this moana.

“Their voices weren’t lost- they were deliberately excluded. This decision is devastating. It confirms that economic interests have been placed above environmental safety, public accountability, and Treaty justice. The fast-track regime isn’t about efficiency- it’s about erasure” said Ngarewa-Packer.

Te Pāti Māori stands in full solidarity with iwi, communities, and all New Zealanders who oppose this decision. We reaffirm our total opposition to seabed mining and the fast-track process that enabled it.

“We must make this a one-term government- and repeal the fast-track regime at the very first opportunity” concluded Ngarewa-Packer.

Update on Kopu Road incident

Source: New Zealand Police

Kopu Road between Kopu and Thames has reopened, after being closed earlier this morning when a person was found with what appeared to be serious injuries.

Police have now established that the person had suffered a medical event.

The person has been airlifted to Waikato Hospital and the road has reopened.

ENDS

Issued by Police Media Centre.