WELLINGTON, April 1 (Reuters) - The New Zealand dollar fell more than 2 percent and debt rallied strongly on Wednesday after the country's central bank warned that recent rises in wholesale interest rates were at odds with its wishes.
Reserve Bank of NZ governor Alan Bollard sent the currency and yields tumbling after he said the outlook for the recession-hit economy remained weak and the bank would be keeping rates low for some time.
"Investors fear that RBNZ may adopt unconventional methods of easing monetary policy, if financial conditions continue to tighten," said Bank of NZ currency strategist Danica Hampton.
The NZ dollar fell to a low of $0.5558, from $0.5700 before the statement. It was trading at $0.5576/80 at 0100 GMT.
Bank bill futures fell as much as 32 basis points, and the yield on government bonds on the secondary market settled 8 basis points lower along the curve.
