Following four consecutive 25 basis point hikes, the Reserve Bank of New Zealand has left the official cash rate unchanged at 3.5 per cent.
Governor Graeme Wheeler said it expected future increases will be needed to keep inflation in check and ensure economic expansion can be sustained.
He said the economy is expected to grow at an annual pace of 3.7 per cent, supported by a rise in construction activity and strength in consumption and business investment.
Lower commodity prices were expected to dull the rate of economic growth in association with the impact of recent rate hikes.
Risks still remained as to how much strong net migration will impact on housing, and the extent to which construction activity spills over into broader inflation.
Mr Wheeler said the New Zealand dollar remained at a level that was "unjustified and unsustainable".
"We expect a further significant depreciation, which should be reinforced as monetary policy in the US begins to normalise," he said.
The dollar dipped to a seven-month low after the decision.
It fell below 82 US cents after the statement from 82.15 cents immediately before. The trade-weighted index dropped to 78.49 from 78.65.
In July, Mr Wheeler signalled a pause in the bank's current tightening cycle, saying the bank needed to take "some time" for "a period of assessment" was needed to gauge the impact of the four rate hikes this year.
The market has pared back expectations for a rise in the key rate again this year as global commodity prices fall from their earlier highs, and as consumer prices rise at a tamer pace than anticipated.
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