Finance Minister Bill English says the New Zealand dollar could rise if the central bank were to cut interest rates in a bid to lower the exchange rate.
Mr English told a parliamentary select committee that a move by the Reserve Bank to cut the official cash rate to lower the value of the currency might have the reverse effect.
He says the market might view any cut to mean that interest rates will rise further later on, prompting investors to buy the Kiwi.
Mr English also told the committee the high exchange rate is a headwind for the export sector, but there's very little that could be done to bring its down.
Separately, the Finance Minister announced this year's Budget will be presented on 16 May.