Reserve Bank governor Graeme Wheeler delivered a warning to the financial markets yesterday - don't assume interest rates can only go up from here.

Dramatic satellite images of the country taken a year apart highlight the North Island's desperate need for rain as the drought continues.

Mighty River Power has rejected a request to top up the "extremely low" Waikato River and people are being warned that a rain forecast will not be a "silver bullet".

Most of the North Island could be declared a drought zone by the end of the week, but Prime Minister John Key says the impact on the Government's books remains to be seen.

Slaughterman Kent Sambells' workload was "hectic" last week as Waikato farmers called him in to destroy ailing cattle and take them away for processing into pet food.

Long-awaited rain is forecast for the drought-hit Northland region, with showers expected in some areas over the weekend.

Bill English must be asking himself what he did in some past life to have seemingly so incensed the forces of nature, writes John Armstrong. "What next? A plague of locusts? Or frogs? Or boils?"

The waiting list for water delivery on Waiheke Island is getting so long some families need to go without water for days on end.

Primary Industries Minister Nathan Guy has defended his decision to stay with a trade delegation in South America rather than returning home to contend with the drought.

No farmers have applied for hardship assistance after the Government cleared the way for the extra support by declaring five regions drought-affected.

Waikato dairy farmer Peter Brown rates his anxiety levels "about a 7.5" out of 10 as he endures his second drought in just five years.

Most of the North Island is currently in the grip of a historic drought that is the most severe in over 70 years of climate records.

The parched North Island won't see rain for at least a week as hot, dry weather continues in what has been described as one of the worst droughts since the 1940s.

A climate expert believes summers like this one will become the new norm for New Zealand. Droughts have already been declared across much of the North Island.

A shortage of water across the Wellington region means there is now a ban on garden sprinklers and irrigation systems.

The drought is working its way down the country, and with with no change predicted until at least mid-March, farmers from Northland to Southland are suffering.

Big dry forces stock selloffs, but Aucklanders can still water gardens, wash cars thanks to Waikato River supplies

A tropical cyclone and three other heavy rain patterns are due to position themselves above NZ this weekend, but it is unlikely they will bring much-needed rain.

Droughts have been declared in South Auckland, Waikato, Bay of Plenty and Hawkes Bay regions, a week after drought was declared in Northland.

Here comes the end of the golden weather - but March is still forecast to treat sunseekers to the afterglow of an extremely fine summer.

A drought is expected to be declared in the Waikato this week after brief showers did little to help parched farms, and the Hawkes Bay is expected to follow suit.

A spell of the driest weather for years has parts of the North Island on drought alert. Cracks in the soil, dead grass, vegetables half their normal size, dry forests and fire alerts, are just some of the symptoms of the region's drought.

Patchy showers have fallen in the central, northern and eastern North Island this morning, but barely enough to top up water tanks and penetrate dry soil.

The big dry has parts of the country firmly in its grip. The Government has declared a drought in Northland and is expected to do so in Waikato.