The New Zealand dollar has hit a five-year low, brought down by falling dairy prices.

A 10.8% reduction in whole milk powder is largely responsible.

As a result, the kiwi dropped to just over 67 US cents overnight.

And dairy prices in general fell to a six-year low.

That's causing some of the weakest rural and business confidence in a decade.

The Reserve Bank has begun cutting the official cash rate to bolster the downturn.