The Secretary of the Treasury says New Zealand faces higher interest rates because of governments borrowing around the world.
John Whitehead issued the warning on the sidelines of this year's APEC meeting in Singapore.
Mr Whitehead's comments came after World Bank head Robert Zoellick urged APEC leaders to keep emergency measures in place to aid the recovery.
Mr Whitehead says this could come at a cost.
He says increased government borrowing by countries such as Japan is putting upward pressure on interest rates.
Mr Whitehead says the United States' policy of maintaining a flexible exchange rate is also an issue.
He says this, coupled with the world economy's recovery, is putting upward pressure on currencies such as the New Zealand dollar.
