The dollar has further to fall against the currencies of New Zealand's trading partners before the Reserve Bank believes its level is justified, an economist says.

Yesterday, the central bank left the door open to potential cuts in interest rates, saying any moves in either direction will depend on economic data.

Chief economist at Westpac Dominick Stephens said the Reserve Bank wants a lower New Zealand dollar.

He said although the kiwi had been falling against the US dollar it had been rising against the Australian dollar, the Euro and the Yen

"On a trade weighted basis the New Zealand dollar has been on a strengthening path," he said.

Figures released yesterday showed the Reserve Bank sold $16 million in New Zealand currency in December.