New Zealand's Reserve Bank has kept the official cash rate at 3.5 per cent, and governor Graeme Wheeler anticipates it will remain at its current level for some time.
The move to keep rates on hold on Thursday morning came as no surprise, but Mr Wheeler has softened his wording around future rate hikes which were signalled at December's monetary policy statement.
Back then he indicated 75 basis points of rises in the OCR, starting later in 2015 and hitting 4.25 per cent by late 2017.
But global economic headwinds have since emerged and Mr Wheeler has moved to a more neutral bias.
In comments accompanying Thursday's decision he said the rate may even be cut.
"In the current circumstances, we expect to keep the OCR on hold for some time. Future interest rate adjustments, either up or down, will depend on the emerging flow of economic data," he said.
Mr Wheeler said despite recent falls in the value of the New Zealand dollar it remained overvalued.
"We believe the exchange rate remains unjustified in terms of current economic conditions, particularly export prices, and unsustainable in terms of New Zealand's long-term economic fundamentals. We expect to see a further significant depreciation."
The New Zealand dollar dropped to a fresh three-year low after the announcement.
It fell as low as US73.67 cents, matching the low it touched in November 2011. The kiwi was recently trading at US73.74c, from US74.44c immediately before the release of the statement.
Mr Wheeler said while annual economic growth remained above three per cent, supported by rising construction activity and household incomes, the reduced dairy payout, the risk of drought and the high exchange rate would weigh on growth.
Annual inflation is expected to come in under the targeted band of 1-3 per cent for 2015 and he said it may even become negative for a period before moving back towards two per cent but more slowly that previously thought.
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