Economics is my day job and I'll tackle just about anything but definitely not macroeconomic theory, because I know almost nothing about it for reasons we don't need to explore.
From this position of utter ignorance, I'd really love to know why we shouldn't care about the exchange rate. Because my very crude argument suggests there is at least an arguable case for the RBNZ to lean against the exchange rate. It goes like this.
- Suppressing the exchange rate is feasible. We would go bust very quickly if we tried to pump up the $NZ, but we could keep it low for an extended period if we wanted.
- It would expand the scope of the non-traded sector. At the margin, there would be more kiwis doing productive work here, because they'd be more competitive with foreign producers.
- The tradable sector would benefit, for obvious reasons.
The price of imports would rise of course. That is a negative. But its not a-priori obvious why it exceeds the benefits.