New Zealand inflation has been steady in the third quarter of the year, slowing the annual pace of price increases.
The consumers price index was unchanged at 0.3 per cent in the three months ended September 30 from the second quarter, for an annual pace of one per cent, according to Statistics New Zealand.
The quarterly pace was lower than the 0.5 per cent expected in a Reuters survey of economists, and below the Reserve Bank's 0.7 per cent forecast, opening up the possibility Reserve Bank governor Graeme Wheeler will delay the resumption of hiking interest rates.
The annual pace slowed from 1.6 per cent in the second quarter, and was only just within the central bank's target band of between one and three per cent.
The New Zealand dollar dropped as low as 78.64 US cents from 79.09 cents immediately before the data release.
"New Zealand looks ripe for an inflation blowout but the global environment is, fortuitously, conspiring against this," Bank of New Zealand head of research Stephen Toplis said in a note before the release.
"Taking all things into consideration, we have thus lowered both our short and medium term inflation forecasts."
BNZ expected the annual pace of inflation to be 1.2 per cent this quarter, and economists have been preparing to push out their interest rate expectations on the prospect of tepid inflation.
Thursday's data showed cheaper household contents and services and communication kept a lid on inflation, while food prices, which account for about 19 per cent of the CPI, were flat in the quarter.
Prices of household contents and services fell 1.3 per cent in the quarter for an annual decline of 0.4 per cent.
Retailers increased discounting of furniture and furnishings, carpets, and small household appliances in the quarter.
Communication prices fell 1.4 per cent, led by a 7.5 per cent drop in prices for telecommunications equipment, which were down almost 25 per cent on the year.
Prices for housing and household utilities rose one per cent in the quarter for an annual increase of 3.4 per cent.
New housing prices rose 1.1 per cent in the three month period, for an annual increase of 4.8 per cent, largely driven by booming property markets in Auckland and Christchurch.
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