The New Zealand dollar dropped below 80 US cents for the first time since September last year after Reserve Bank governor Graeme Wheeler said the currency was still unjustifiably high, a consideration he takes into account as to whether intervention is appropriate.
The kiwi fell as low as 79.91 US cents, trading at 79.94 cents at 5pm in Wellington, down from 80.73 cents at 8am and 80.80 cents yesterday. The trade-weighted index dropped to 77.62 from 78.15 yesterday.
Wheeler reiterated his view the local currency's strength was "unsustainable and unjustified", which he called "important considerations in assessing whether exchange rate intervention is feasible" along with whether on-market activity would be effective.
Wheeler's jawboning comes ahead of Reserve Bank figures on Monday which will show whether the central bank was active in the foreign exchange market in August.
Speculation the bank intervened prompted the kiwi to spike lower on the morning of Aug. 25.