The Reserve Bank says unrealised gains on its foreign currency reserves are being eroded by the surging value of the New Zealand dollar.
Sales of foreign exchange reserves led to a gain of $434 million for the Reserve Bank last year.
These gains were the main contributor to a dividend of $630 million to the Government, which was announced last week.
The bank profited from selling foreign exchange and buying New Zealand dollars in a four-month period to March as the kiwi fell.
But Governor Alan Bollard told the Finance and Expenditure Select Committee at Parliament on Wednesday that the Kiwi's rise is eroding any further gains.
He said the bank's equity has fallen by almost $300 million since June.
