The temerity of the Reserve Bank of New Zealand is praiseworthy. While developed market central banks from Brussels to Sydney to Tokyo to Washington, D.C. have engaged in some type of easy monetary policy, either via low interest rates, asset purchases or both, RBNZ has held steady.

At 2.5%, New Zealand is home to some of the developed world’s highest benchmark interest rates. RBNZ has seemingly taken pride in eschewing rate reductions and easing despite the adverse impact the strong New Zealand dollar has on the country’s exporters.

The iShares MSCI New Zealand Capped ETF (NYSEArca: ENZL) has for much of 2013 been among the better performing single-country ETFs tracking a developed market. However, it appears the strong kiwi is finally affecting ENZL as the fund has dipped 5.7% in the past month. [10 Best Single Country ETFs]

ENZL’s recent woes put the spotlight on RBNZ’s 2014 intentions, which as some currency traders seem to believe, include higher rates. RBNZ recently “its inflation-fighting rhetoric and signaled it will start raising interest rates in the first half of next year as the economy strengthens,” reports Tracy Withers for Bloomberg.

Fearful of possible housing bubble amid increasingly frothy residential real estate prices, RBNZ is expected to raise rates, perhaps around the time the Federal Reserve begins tapering its easing program. “There is a 87 percent chance of a rate increase by March (by RBNZ),” according to swaps data compiled by Bloomberg.