An investment risk manager says the Reserve Bank has not done itself any favours by failing to follow through with actions to drive the currency down.
The central bank has refrained from any direct currency intervention since August, other than to say the kiwi dollar is unjustified and unsustainable at current levels.
The Reserve Bank's most recent statistics for September and October show it has not been an active seller in the market.
Bancorp Treasury Services senior client advisor Peter Cavanaugh said the fact the bank had not sold any dollars since August indicated the governor was reluctant to take on the market, and the market knew it.
"There's been a complete lack of follow-through action by the Reserve Bank, and as a result the New Zealand dollar has been clawing back from the lows.
"And more absurdly from the Reserve Bank's point of view, on a trade weighted index basis the New Zealand dollar's fall since the end of August has been very small, in total only one percent," he said.
Mr Cavanaugh said the Reserve Bank could use other measures to influence the value of the dollar, such as lowering its projections for growth, inflation and 90-day bank bill rates, when it releases its next monetary policy statement on 11 December.
