WELLINGTON (Reuters) - New Zealanders go to the polls on Saturday in the most volatile and hard-fought race in recent history, which could usher in a change in openness to migration and trade and the central bank’s approach to monetary policy.

New Zealand's new opposition Labour party leader, Jacinda Ardern, speaks during an event held ahead of the national election at the Te Papa Museum in Wellington, New Zealand August 23, 2017. REUTERS/Ross Setford/Files

Volatile opinion polls have shown a neck-and-neck race, although the ruling National Party of Prime Minister Bill English has led in recent polls, with two giving it a lead of nearly 10 points.

A change in the Labour Party leadership last month turned what had been expected to be a dull campaign into a nail-biting event, with 37-year old Jacinda Ardern vying to become the third woman prime minister and the youngest of recent times.

“It’s tight,” Ardern, whose popularity prompted media to coin the term “Jacindamania”, said on Friday. “It shows that every single vote will count and that turnout will determine this election.”Labour hopes to ride a worldwide wave of change that most recently propelled France’s Emmanuel Macron to become its youngest head of state since Napoleon.

English, a 55-year-old former finance minister who took over after John Key’s shock resignation last year, is making his second bid to be elected leader after a failed attempt in 2002.

Both leaders are expected to stay the course in terms of fiscal prudence, but will probably differ on monetary policy, trade and immigration, spelling ramifications for the New Zealand dollar, the world’s 11th most traded currency in 2016.

Ardern wants to add employment to the central bank’s inflation-targeting mandate, which could mean more stimulatory monetary policy. She also wants to cut migration and renegotiate certain trade deals, which some worry could hurt two key sources of growth for New Zealand’s small, outward-looking economy.

Election uncertainty could have temporarily weighed on the economy, by making firms more cautious over investments and hiring, said Philip Borkin, a senior economist at ANZ.

A tight outcome could weigh on the currency as could one foreshadowing a change in government, he added.

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“If it comes in and shows there is a decent chance of a change in government, I think that could be a factor weighing on the currency, just from an unknown point of view.”

MINOR PARTIES

Given New Zealand’s German-style proportional representation system, it could take weeks to determine the composition of the new government, with minority parties expected to have an outsize impact.

About 986,000 ballots have already been cast, says the Electoral Commission, accounting for almost a third of the 3.2 million voters enrolled. In past elections, advanced votes pointed to the final results.

But “special votes”, from voters overseas and outside their home constituencies, could sway the outcome. This category, which made up 12 percent of votes in 2014, will only be announced on Oct. 7.

The new government’s make-up will also depend on negotiations between parties that could last weeks, particularly if the results are close.

Winston Peters, leader of the nationalist New Zealand First Party, which is likely to become the kingmaker, has declined to say which bloc of parties will get his support until the results become official on Oct. 12.

With a loss in momentum in the Labour campaign, the latest polls suggest it is more likely that Peters will join forces with National, said Oliver Hartwich, executive director at the New Zealand Initiative think tank.

“It would be hard for him to argue why he would give it to Labour if they are really 8 to 9 percentage points behind,” he added.

For a graphic on New Zealand's parliamentary elections, click: tmsnrt.rs/2joJZGV

For a graphic on New Zealand markets react to opinion polls, click: tmsnrt.rs/2faMawe