Trump's war on Iran is rattling the NZ dollar. Here’s how that’s costing our 600,000 Kiwi business owners

Wednesday, 18 March 2026

War in Iran is sending the New Zealand dollar lower, potentially hitting the margins of 600,000 local businesses.

Because New Zealand is so reliant on suppliers and products based abroad, many of our businesses are impacted by the exchange rates they get for a New Zealand dollar.

As the Kiwi dollar slides, import costs spike. For many, this isn't just an accounting headache; it’s a threat to their survival. Even if you aren’t a direct importer, the value of our currency also determines how much oil we get for every dollar spent, which in turn impacts our cost of fuel.

On the flip side, businesses that export goods from New Zealand can benefit from a weaker Kiwi dollar in that their earnings (often in US dollars) will translate to more money at home.

Stuff reader Sam* wrote in expressing concern about recent fluctuations in currency values after the United States and Israel attacked Iran. Sam explained that their business had successfully raised funds from investors and now had around AU$5 million in funds in their Australian account.

The problem is that their main suppliers are based in the United States and Europe while their staff is largely based in New Zealand, which means they will need to conduct a number of complex currency exchanges to pay suppliers while ensuring that their runway goes the distance.

With so much volatility and uncertainty in global markets at the moment, the wrong decision could quickly shorten the runway of funds a business has available to reach its objectives.

Making your money go the distance

For businesses that import goods or rely on international suppliers, the falling Kiwi dollar can quickly eat into margins.

When the currency weakens, shipments priced in US dollars, euros or Australian dollars suddenly cost more in New Zealand terms. For retailers already operating on tight margins, that can leave little choice but to absorb the hit, renegotiate with suppliers, or eventually pass costs on to customers.

Chris Henderson, ASB’s head of global markets distribution, says “business owners are understandably worried about the recent market movements and swings in the exchange rates.”

His advice is to have a clear plan on when you will actually need that money and in which currencies.

But while importers feel the squeeze, exporters can see the opposite effect.

When export revenue is paid in foreign currencies such as US dollars, a weaker Kiwi dollar means those earnings convert into more money once brought back to New Zealand. That can provide a lift for sectors like agriculture, tourism and technology.

Entrepreneur Janine Grainger says the challenge in managing this is greatest for businesses operating across multiple currencies because they need to understand how their buying power shifts across borders.

“When your revenues or fundraises are in one currency, but your expenses are in another, ignoring foreign exchange can become a very expensive business lesson,” she says.

For startups in particular, exchange rate swings can quickly affect how long their funding lasts.

But there are things you can do.

Grainger says it pays to shop around because different organisations will offer different exchange rates. Specialist brokers or even so-called “neo banks” (tech companies that offer banking services) could offer better rates than those offered by a traditional bank.

She says a bit of strategy can also help.

When you’re moving large sums of money between currencies (for your business or to buy a property), even a tiny change in the exchange rate can cause you to lose a fortune.

“Remember, every conversion costs,” she says, explaining that there are ways companies can protect themselves from shock currency changes.

Forward contracts and swaps act like a 'price lock' or insurance policy, allowing you to agree on today's rate for a deal happening later so you don't get stuck with a massive, unexpected bill if the market crashes. The key is asking your provider what’s available.

The bucket strategy

Startup executive and CEO of PhaseOne Ventures Mahesh Muralidhar tells Stuff that most startups can benefit from keeping things simple and thinking in terms of a few distinct buckets of money.

Muralidhar suggests a three-tier defense:

• Operating bucket: this comes down to paying day-to-day expenses, including salaries, subscriptions and smaller operational items.

• Cashflow bucket: a monthly buffer to track spending against the annual budget.

• Treasury bucket: the bulk of your capital sits here. This should be relatively low-risk, earning a modest return, but still accessible if the company needs liquidity quickly, he says.

It fundamentally comes down to runway management, says Muralidhar.

Much of this comes down to having a strategy and sticking to it, even as geopolitical tension throws up fresh surprises.

In high-volatility markets, panic is the most expensive mistake you can make.

So what’s your view on the current exchange rate? Has it affected your business or your travel plans? Let us know in the comments below.

*The name of the individual in this story has been changed to protect their privacy.