For example, a phone call to a bank’s treasury may be answered by someone located in Sydney rather than in Wellington or Auckland. Or we find that particular types of transactions entered into with New Zealand-based customers are being booked through another jurisdiction and do not appear on the New Zealand balance sheet.
This is another example of European issues affecting the local market, as the widening is partly a function of the lower volume of Kangaroo issuance in recent months. The Kangaroo issuers seek to swap the $ funding they raise back into foreign currency, while the Australian banks do the reverse with their foreign currency raisings.