A market strategist says there is a risk the Reserve Bank could intervene in the currency market if it considers the level of the exchange rate is too high.
Last week, the New Zealand dollar broke through US86 cents and currency strategists don't think it's too far off hitting the 88.5 cent high it reached nearly two years ago - its highest since the currency was floated in 1985.
The kiwi also hit a record high on the Trade Weighted Index, which measures the value of the New Zealand dollar against the currencies of its major trading partners, of 79.57.
In 2007 the Reserve Bank made its only openly publicised intervention, causing the dollar to drop by around a cent from it's then-post-float high of 76 cents, and also making a handsome profit off the back of it.
And the bank says it's intervened less openly at other times by buying or selling the kiwi.
Westpac market strategist Imre Speizer says the Reserve Bank will intervene only if it thinks it will have a good chance of success.
He said there are four factors that allow the Reserve Bank to intervene in the currency markets and three of those conditions now apply.
Mr Speizer said factors in favour of intervention include that the New Zealand currency is at an extreme high, that most people believe it is justified by fundamentals which are too high and have been outpaced by the currency, and thirdly that intervention would be consistent with monetary policy.
"The one which is probably not ticked is that intervention would be opportune, that is it would have a good chance for success, if the Reserve Bank intervened right now, even though the currency is very high, it would probably not succeed."
Mr Speizer said that's because the currency is high due to offshore central bank quantitative easing from the likes of the US central bank and the Japanese central bank.
He said these are powerful forces which the Reserve Bank in New Zealand is not able to battle.