Exporters could obtain a respite from the soaring New Zealand currency this month as record amounts of bonds held by overseas investors, mature.
Currency experts agree a mass withdrawal from these investments by mainly Japanese investors could undermine the dollar. But they are divided about whether an exodus will happen.
BNZ currency strategist Danica Hampton says investors in the Eurokiwi and Uradashi bonds have been bailing out for countries with better interest rates.
If the trend continues, she says the currency will drop below its current levels when a record $NZ4 billion of the bonds is due to be repaid in July.
However, Derek Rankin of Rankin Advisory says the investments remain attractive because of New Zealand's good credit rating.
Exporters have had to contend with a 20% surge in the dollar since March.
The kiwi's strength during this time was due to weakness in the US dollar and resurgent world sharemarkets.
FX Matters director Anthony Byett expects the dollar will finish 2009 around its current level of 65 cents US.
However, Mr Rankin says the kiwi could be heading higher against the Australian dollar too.
He says large top-ups needed by Australian private equity companyb investments in New Zealand could push the kiwi up to around 85 cents against the Australian dollar.
Radio New Zealand's economics correspondent says this compares to 80 cents currently and would be bad news for exporters to New Zealand's largest market.
BERL economist Ganesh Nana told Morning Report the volatility of the dollar been a problem for manufacturers for so long, it is a credit to the sector that it remains so robust.
He said there are no simple solutions to solve the immediate problem.