Strong overseas demand for the New Zealand dollar is likely to form a major barrier to attempts by the Reserve Bank to bring it down, say analysts.

The Reserve Bank says its plans for dealing with potential bank collapses are very different from what's being seen in Cyprus.

The International Monetary Fund counsels against "messing with" the NZ monetary policy framework.

The kiwi dollar dropped by 1 US cent after the Reserve Bank warned that a strong currency could always prompt an OCR cut.

The Reserve Bank says the Official Cash Rate will stay at its record low of 2.5pc. The kiwi dollar dropped on the news.