However, the strength of the real exchange rate since 2010 is partly related to the increase in the terms of trade over this period (figure 12), which provided some offset to the dynamics noted above. Figure 12: Real TWI and the merchandise terms of trade (OTI)  Source: RBNZ (real analytical TWI 17 post-1984, real analytical TWI 5 pre-1984), Statistics New Zealand.
The improvement in NFL-GDP suggests that the exchange rate may be more sustainable than previously assumed. However, the improvement has been from a very high starting 15 See Orr, Edey and Kennedy (1995) and OECD (2013). 16 See figure 5 in Williams (2017). Ref #7076865 v2.1  14  point.