NZ ups reserves as "insurance"

"While it is an unlikely event for a well-managed economy with a floating exchange rate, the New Zealand economy cannot afford to face a situation of a non-convertible currency," Orr said.

The proposals, originally made in early March, are necessary because the FX market has grown since the bank’s current reserve level was "largely set" in 1984, he explained.

However, intervention would be kept to a minimum. "We do not intend wasting our reserves by defending a particular exchange rate level