OECD have a view on the NZD, reckon it is slightly overvalued
Highlights of the OECD's latest on NZ, the 2017 Economic Survey of New Zealand
- New Zealand continues to enjoy a strong, broad-based economic expansion
- Productivity remains well below that of leading OECD countries
- Employment has been shifting towards high-skilled occupations
More specifically, on the currency:
- The real exchange rate has strengthened but remains below the peak reached in 2014. Even so, the currency may be slightly overvalued, partly owing to New Zealand's more advanced stage in the business cycle - and hence need for earlier policy rate increases - than many other advanced countries.
On risks to NZ...
- The biggest downside risk to these projections is a disorderly housing market correction, described along with other extreme but inherently unquantifiable potential shocks in Table 2