WELLINGTON: The New Zealand central bank held its benchmark cash rate steady at 2.5 percent on Wednesday, as expected, and said it expected to hold rates for the rest of the year as it saw inflation risks staying contained even as economic growth picked up.
All 17 analysts in a Reuters poll had expected no change at this review, with five seeing a rise sometime between September and December this year, and the remaining 12 looking at 2014.
In the March 14 monetary policy statement, the RBNZ pointed to signs of improving domestic demand and global outlook, but warned about increasing house price inflation and the financial stability or inflation risks that might occur if demand gets too far ahead of supply.
Financial market pricing before Thursday's decision implied no chance of a 25 basis points rate move at this review, and 12 basis points of hikes over the next 12 months.
RBNZ governor Graeme Wheeler, appointed governor in September last year, has said he will focus on keeping inflation around 2 percent within the established 1-3 percent band, and will look closely at inflation expectations and asset prices.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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