Economists predict the New Zealand Dollar will stabilise today, after it plunged overnight.

The Kiwi dollar dropped about half a US cent in the space of just a few minutes, as markets awaited the outcome of talks to form a new government.

It's now trading at 70.25 US cents.

But ANZ Chief Economist, Cameron Bagrie told Rachel Smalley it's Labour's plans to drastically cut immigration numbers that are the country's main concern.

"The biggest problem facing firms out there at the moment is finding skilled labour and that is a big economic problem. It's not a lack of demand holding firms back it's the ability to meet that demand. We need the skilled labour and we import that capital in the form of migrants coming through the door at the moment."

LISTEN ABOVE CAMERON BAGRIE SPEAKS WITH RACHEL SMALLEY