Economists say the Reserve Bank's intervention in the foreign exchange market last month was too small to make much difference to the exchange rate.

It could take three to five years to close the gap between housing supply and demand in Auckland, if left to supply measures alone, says Reserve Bank governor Graeme Wheeler.

The Reserve Bank will likely use its new macro prudential tools within the next six months to cool Auckland's overheated housing market, says the New Zealand Institute of Economic Research.

The New Zealand dollar surged to its highest in four and a half years against its Australian counterpart as New Zealand's rising interest rates and growth outlook increase the lure of the nation's currency.

Documents released by the Reserve Bank yesterday give scant support to the Prime Minister's suggestion that it might exempt first home buyers from any restriction on low-deposit home loans.

The number of New Zealand house sales slipped from a six-year high last month, but the national market is still being driven by Auckland and Christchurch.

"While there's been much hand-wringing over housing prices, is intervention by the Reserve Bank really the answer?" asks David Tripe.