New Zealand exporters are diverting shipments originally bound for China into other markets as demand from the country’s biggest trading partner cools, according to Karen Silk, assistant governor at the Reserve Bank of New Zealand. China buys roughly a quarter of New Zealand’s total exports, with volumes nearly double those of the next two biggest markets, the United States and Australia, combined. Wellington supplies more than half of China’s dairy imports, a dominance built under a bilateral free trade agreement that took effect in 2008. The RBNZ raised its key interest rate to 2.75% on Wednesday, its second consecutive hike to combat inflation, signaling another increase could follow by year’s end.
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