The International Monetary Fund has singled out the high value of the New Zealand dollar for comment in its annual stocktake of the economy.
The IMF also says the Government does not need to cut spending any further than it already plans to.
The agency, which is based in Washington DC, says a continuation of the dollar at current levels means New Zealand's already high debt will continue to accumulate at an unsustainable rate.
And it says the kiwi could be overvalued by as much as 20%.
The IMF says the Government's plans to cut its own deficit will help take pressure off the dollar.
But the fund says if it cuts spending more deeply than already signalled, it risks knocking the wind out of the recovery.
