And as an increasing proportion of our exports are moving up the value-chain, our firms are getting a little more pricing power themselves, and hence are less immediately exposed to the effects of exchange rate fluctuations. And, of course, access to sophisticated financial derivatives gives many firms some breathing space to adjust to changes in the exchange rate.
But as a trading nation, exchange rate fluctuations will always be a big influence on the short-term economic outlook, and monetary policy. A rising exchange rate has a very real impact on exporting firms, and those supplying them - here in Christchurch and throughout the country.