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New Zealand was rocked by a powerful earthquake early Monday that killed two people and caused extensive damage to roads and businesses, but avoided the widespread destruction caused by a 2011 quake that killed 185 people. The local dollar fell.

Prime Minister John Key, who flew over affected areas by helicopter, estimated the cost of the damage could run into a “couple of billion” dollars and warned of the psychological impact of the quake, which was followed by dozens of aftershocks. “It just drains the emotional energy away from people,” Key told Radio New Zealand.

The magnitude 7.5 quake struck at 12:02 a.m. local time north of the South Island city of Christchurch that bore the brunt of the 2011 quake. It violently shook the capital city of Wellington at the southern end of the North Island and triggered a tsunami warning. [Editor’s note: While New Zealand’s seismic monitoring agency GeoNet estimated the earthquake had a magnitude of 7.5, the US Geological Survey (USGS) estimated it had a magnitude of 7.8.]

Military personnel were flown by helicopter to the coastal town of Kaikoura to help with the clean-up, after landslides blocked local highways and one person was killed when a historic homestead collapsed. Engineers inspected buildings in the largely-deserted capital city for signs of damage and public transport was suspended until tracks, bridges and tunnels could be checked.

The kiwi dollar fell more than half a U.S. cent in early trading to 70.69 U.S. cents, a one-month low. It pared losses before dropping again and bought 70.89 cents at 6:45 p.m. in Wellington. The country’s benchmark stock gauge, the S&P/NZX 50 Index, climbed 0.6 percent, while Tower Ltd., an insurer, slumped 7 percent.

New Zealand sits on the Pacific Ring of Fire, a belt of volcanic and seismic activity that rings the Pacific Ocean. Christchurch, the third-largest city of about 366,000 residents, is still recovering from the 2011 quake that was the nation’s deadliest in eight decades and destroyed the central business district.

The seismic monitoring agency GeoNet said it appeared the nation had been hit by “two separate but related quakes” — with the shaking lasting around two minutes.

“One thing we can say with certainty: there will be more earthquakes to come,” the agency said on its website.

The Ministry of Civil Defence and Emergency Management issued a tsunami warning for all southern coastal areas, prompting evacuations in some regions. The warning was scaled back after six hours, and later lifted.

Authorities in Wellington urged residents who work in the city to stay home. A number of major buildings in the city showed “signs of structural stress,” regional civil defense controller Bruce Pepperell told the New Zealand Herald newspaper.

Key told reporters that for Wellington, at least, it was the “most significant shock I can ever remember and people will be feeling quite vulnerable.”

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Editor’s note: According to Boston-based catastrophe modeling firm AIR Worldwide, seismic design codes in New Zealand have set stringent requirements for new buildings, and many cities have initiated a comprehensive policy to identify vulnerable pre-1976 buildings with the goal of retrofitting them.

Non-engineered buildings such as unreinforced masonry structures are the most vulnerable types in this region, AIR said in a statement.

The company explained that New Zealand’s Earthquake Commission (EQC) covers the first $100,000 of damage to residential properties and land, and up to $20,000 for damaged contents. Private insurers cover damage beyond that level. Commercial property damage is not covered by the EQC, AIR said, noting that as the earthquake occurred in a sparsely populated area of New Zealand, the total insured value of commercial and industrial exposure is estimated to be relatively low.

Source: AIR Worldwide