There are no simple solutions available to the Reserve Bank to deal with a New Zealand dollar that is significantly overvalued, says governor Graeme Wheeler.

The exchange rate is too high, Reserve Bank governor Graeme Wheeler says, but there are no simple solutions available to the bank to lower it.

The hot dry summer in the North Island is helping to push world dairy prices up - but the high kiwi dollar is taking the cream off the top.

In the fifth straight gain, prices in the latest world dairy auction rose 3.1 per cent overnight, takings prices to their highest level in five months.

New Zealand has become the second country in the world to approve plain cigarette packets.

The Government is expecting legal challenges over plain cigarette packaging and has warned they could cost taxpayers up to $6 million.

The former private equity owners of New Zealand's Independent Liquor allegedly used a technique known as "channel stuffing" to artificially boost the company's earnings in the lead-up to its $1.5 billion sale to Japanese beer giant Asahi.

The Reserve Bank is grappling with the prospect of a property bubble emerging from the current low interest rate environment.

The NZ dollar has risen above 85 US cents for the first time since September 2011 amid expectations retail sales figures today will add to a string of strong data.

John Key went to meet Hollywood bosses with a briefing from officials saying studios were looking for easier ways to target Kiwi who downloaded illegally.

The dollar gained against the greenback as improving US employment figures underpinned a rally on Wall Street.

The Economist's Big Mac Index finds New Zealand's stubbornly high dollar is marginally undervalued against the greenback.