The Reserve Bank of New Zealand is keeping the official cash rate at its record low - for now at least.
Governor Graeme Wheeler said the rate will remain at 2.25 per cent but indicated a cut is in the pipeline.
The central bank is striving to coerce annual inflation into its target 1 per cent-to-3 per cent band.
"We expect inflation to strengthen as the effects of low oil prices drop out and as capacity pressures gradually build. Monetary policy will continue to be accommodative.
"Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data," he said.
Traders have tipped the rate will be cut by 25 basis points on June 9 when the bank next reviews the rate and issues its monetary policy statement.
In commentary accompanying the rate decision, Mr Wheeler said the outlook for global growth had deteriorated in recent months and despite commodity prices lifting they remained weak.
The New Zealand dollar remain higher than appropriate he said, and there were signs house price inflation in Auckland was picking up.
