The economy is probably in its fifth quarter of recession and the Royal bank of Canada thinks the New Zealand central bank may have to resort to foreign-exchange intervention.

Led by the bank of Japan, the central Banks of the G7 countries undertook their first co-ordinated intervention in currency markets for more than a decade to stabilise a soaring yen.

Though the yuan is still far from being a free-floating currency-the central bank has intervened since August to prop it up-the cost of such intervention is now higher.