New Zealand's trade surplus increased more than expected in March as overseas shipments exceeded forecasts despite strong currency hindering exporters' earnings, data from Statistics New Zealand revealed Friday.
Data also showed that China overtook Australia as New Zealand's top export destination for the first time in the March quarter of 2013.
The country recorded a NZ$718 million trade surplus in March, larger than the NZ$441 million surplus reported in February. This was forecast to rise to NZ$470 million.
For the year ended March, the trade balance showed a deficit of NZ$525 million, less than NZ$883 million shortfall expected.
March's shipments totaled NZ$4.42 billion compared to forecast of NZ$4.28 billion. In February, exports amounted to NZ$3.90 billion. Annually, exports recorded a growth of 5.1 percent.
Imports rose to NZ$3.7 billion from NZ$3.46 billion in February. This was slightly below expectations of NZ$3.82 billion. Compared to March 2012, imports fell 7.9 percent.
Further, the statistical office said around 20 percent of goods exported by New Zealand were shipped to China last quarter and the merchandize was valued at NZ$2.3 billion.
Exports to Australia totaled NZ$2.2 billion in March quarter. January was the first month in which exports to China surpassed Australia with the trend continuing for every month of the quarter.
Reserve Bank of New Zealand Governor Graeme Wheeler said Wednesday that the New Zealand dollar remained overvalued and is higher than projected in March, partly due to spillover effect from the quantitative easing program announced by Japan this month.
Wheeler also cautioned that the currency strength may continue to be a significant headwind for the tradables sector, restricting export earnings and encouraging demand for imports.
The central bank, however, retained the interest rate unchanged at 2.5 percent and said the rate may remain the same throughout this year.
by RTT Staff Writer
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