http://nz.biz.yahoo.com//090430/26/c2qo.html

WELLINGTON, April 30 (Reuters) - The New Zealand dollar NZD= fell around a cent on Thursday, and hit a seven-week low against the Aussie dollar, after the central bank cut interest rates and pledged to keep them low until late 2010.

The 50 basis point cut to a record low 2.5 percent had been expected, but still saw the kiwi hit a low of $0.5634, from $0.5730/40 prior to the announcement. It had steadied to trade at $0.5652/57 by 0530 GMT. [nWEL391595]

Swap rates NZDIRS fell across the curve, and especially at the short-end, with two-year swaps NZDSM3NB2Y= down 26 basis points at 3.35 percent and five-year swaps NZDSM3NB5Y= 14 basis points lower at 4.62 percent.

"(It) is designed to keep the entire yield curve down and, more importantly, to bring the currency down," said ANZ-National Bank senior markets economist Khoon Goh.

A commitment from the Reserve Bank of New Zealand (RBNZ) to keep the benchmark cash rate at or below its current level until the latter part of 2010 was seen as a warning to markets not to price in higher rates too soon.

New Zealand is mired in a long and deep-rooted recession, but there has been market speculation the central bank would not be able to ease policy much further because of the need to maintain the country's yield attraction for foreign investors.

RBNZ governor Alan Bollard said rates could still move slightly lower, and a Reuters poll taken after the decision saw economists forecasting a 25 basis point cut at the next review on June 11. [nWEL358811]

The move took New Zealand rates 50 basis point below benchmark rates in Australia and saw investors push the Australian dollar to a seven-week high against the kiwi AUDNZD=R around NZ$1.2826, up from NZ$1.2602 late on Wednesday.

The Reserve Bank of Australia holds its next policy meeting on Tuesday and is widely expected to hold rates at 3 percent.

The spread of swine flu, which has already arrived in New Zealand, did not have a major market influence.

New Zealand said it had 13 confirmed or probable cases of swine flu with a further 104 being checked for Influenza A, the same family as swine flu. [nFLU]

New Zealand government bonds gained on the prospect of lower rates for longer. The yield on the benchmark NZ 10-year bond NZ10YT=RR, which moves inversely to price, fell 9 basis points to 5.30 percent. Yields on shorter-end debt fell up to 28 basis points. (Reporting by Mantik Kusjanto; Editing by James Thornhill)