The indicator reflects changes in food prices. Higher food prices can result in economic slowdown because less disposable income will be used for non-food expenditures. Higher food prices can also result in inflation and signal future monetary action.
The indicator has little influence on the New Zealand dollar and is only important from the perspective of the fact that New Zealand is an agricultural country, and a substantial part of its GDP is export of agricultural products. Thus, the indicator reflects the needs of products of New Zealand and its national currency.