Plain language law

New Zealand law explained for everyone

Local Government Act 2002

Planning, decision-making, and accountability - Borrowing and security - Borrowing

113: Prohibition on borrowing in foreign currency

You could also call this:

“Councils can't borrow money in foreign money, except for special cases”

You are not allowed to borrow money or make any related financial arrangements in any currency other than New Zealand dollars. This rule applies whether you’re doing it inside or outside of New Zealand.

However, there is one exception to this rule. If you have an investment in a foreign currency, you can make arrangements related to that investment in that foreign currency.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM172393.

Topics:
Government and voting > Local councils
Money and consumer rights > Banking and loans
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Part 6 Planning, decision-making, and accountability
Borrowing and security: Borrowing

113Prohibition on borrowing in foreign currency

  1. No local authority may borrow or enter into incidental arrangements, within or outside New Zealand, in currency other than New Zealand currency.

  2. Subsection (1) does not apply to an incidental arrangement in relation to an investment in currency other than New Zealand currency.

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Notes
  • Section 113(2): added, on , by section 12 of the Local Government Act 2002 Amendment Act 2006 (2006 No 26).