The Reserve Bank has left the official cash rate at 1.75 per cent, a move widely expected by financial markets.
The New Zealand dollar jumped, however, with the Reserve Bank still indicating it expects to begin raising the benchmark OCR from next year.
Governor Graeme Wheeler said in a statement that economic growth was expected to pick up in the coming months, supported by strong net migration, low interest rates and spending outlined in the May Budget.
But Wheeler, who leaves the job next month, said headline inflation was likely to decline and the outlook for tradables inflation was weak.
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The Reserve Bank’s indication it’s still considering rate rises next year gave the NZ dollar a boost.