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New Zealand · Economy & Business · Hard
Which 1984 constitutional crisis, triggered by an outgoing Prime Minister's refusal to devalue the dollar against the incoming government's wishes, precipitated a currency float within months?
Answer: The 1984 currency crisis — Robert Muldoon's refusal to devalue the New Zealand dollar after the 1984 election, despite urgent advice from the incoming government and the Reserve Bank, created a constitutional standoff that was resolved only after the dollar was devalued by 20%.
- A The Winebox affair
- B The 1998 drought crisis
- C The 1984 currency crisis ✓
- D The Black Monday crash
Robert Muldoon's refusal to devalue the New Zealand dollar after the 1984 election, despite urgent advice from the incoming government and the Reserve Bank, created a constitutional standoff that was resolved only after the dollar was devalued by 20%.