While there has been some freeing up of wholesale funding markets since December, the higher New Zealand dollar means the cost to New Zealand banks has become slightly more expensive, Wong told journalists after the release of the central bank's latest monetary policy statement.
"We've seen that upward pressure on funding costs continue and yet we've seen some reductions in fixed rate mortgages since our last statement (in December)," Wong said.
"While costs are going up, obviously the banks have some comfort, at this stage, to be able to reduce their mortgage rates. It's another indication costs are there but it's not really impacting much on behaviour."
Wong said credit growth and deposit growth are key determinants of whether this will continue.
"At the moment, deposit growth is running well in excess of credit growth. The banks don't actually need to rush out and fund at these higher rates. They're getting lots of money in the door and that takes the pressure off their funding."
Higher funding costs have led Australian banks to hike their variable mortgage rates, even though the Reserve Bank of Australia has held its cash rate steady.
Reserve Bank of New Zealand governor Alan Bollard said in this country we accept that changes in his official cash rate (OCR) are only one factor impacting banks' cost of funds.
"We've never expected to see a mechanical-type relationship between that (the OCR) and funding more generally," Bollard said.
While house sales and consents to build new houses are recovering, and residential investment should show some growth this year, Bollard said he doesn't expect much pressure on house prices.
The rebuilding of Christchurch should also contribute to housing market activity.
"To the extent that's driven by demographics, and the fact that there's been very little investment for some years, that's a desirable thing, not a worry," Bollard said.
