11 Feb 2014

NZ dollar predicted to remain high

6:58 pm on 11 February 2014

Westpac is forecasting the New Zealand dollar will remain above 80 US cents and above 90 Australian cents until the end of next year.

In its latest economic overview, the bank says global prices for New Zealand's main exports have reached extremely high levels.

Westpac chief economist, Dominick Stephens, says the high prices are specific to New Zealand rather than part of a more generalised commodity price boom.

Mr Stephens says if the high terms of trade are sustained, there would be a boost to economic growth as well as to the currency.

"We expect the Kiwi to average 94 cents against the Australian dollar this year and to remain above 80 cents against the US all year.

"Of course that's a serious headwind for those parts of our export sector that aren't enjoying high global prices."