Wheeler said economic growth in the second half of past year was weaker than expected, although the outlook was still positive citing "ongoing accommodative monetary policy, strong population growth, and high levels of household spending and construction activity", and the Reserve Bank raised its forecast for economic growth from late 2017.
While the market had anticipated tighter policy guidance as a result of rising inflation and NZD weakness, the RBNZ noted that "developments since the February Monetary Policy Statement on balance are considered to be neutral for the stance of monetary policy".
The RBNZ held its overnight cash rate at a record low 1.75 percent as expected and said the stance for monetary policy is neutral though it would adjust policy if new conditions warrants.
For the text of the statement double click on. He said that New Zealand banks were nearing their wholesale funding capacity which would which increase competition for deposits.
The kiwi advanced to 69.34 USA cents as at 8am in Wellington from 69.01 cents late yesterday.
Wheeler is wary of stoking expectations of a rate increase for fear of boosting the kiwi dollar and curbing inflation, which returned to the midpoint of the RBNZ's 1-3 percent target band in the first quarter for the first time in more than five years.
Around 22 killed by collapsing wall at Indian wedding
Then the 80-feet-long (32-meters-long) wall collapsed onto people inside the wedding hall, Bharatpur District Magistrate N.K. There were also 26 people injured, 15 of them seriously, with rescue efforts made more hard because of a power cut.
He also suggests the NZD may not see as much upside as expected if the RBNZ bring forward their forecasts as the market tends to pay little head to them, although we at Pound Sterling Live, see a strong possibility of a reaction from NZD to a change in forecasts.
"While the OCR will no doubt be left unchanged at 1.75 percent, attention will be on the tone, which we expect to remain balanced, cautious and watchful", Bagrie said.
Wheeler shrugged off higher-than-expected March quarter inflation of 1.0 percent, blaming it on temporary factors and saying annual price rises would remain in the bank's 1.0-3.0 target range. Economists say this will be hard to justify given the latest rise in inflation. The market will get an early update on how inflation is tracking later this morning with the release of the food price index for April.
Governor Graeme Wheeler said in a statement, "House price inflation has moderated further, especially in Auckland".
"This moderation is expected to continue, although there is a risk of resurgence given the continuing imbalance between supply and demand", Wheeler said.