(Updates with detail from New Zealand central bank statement)
New Zealand's central bank held the cash rate steady at 5.5% on Wednesday, as it reiterated that its previous rate hikes had helped slow the economy and constrain inflation but inflation remained above its target.
The decision was in line with expectations from all 29 economists in a Reuters poll, which forecast the Reserve Bank of New Zealand (RBNZ) would leave the cash rate at a 15-year high for the sixth consecutive meeting.
"Ongoing restrictive monetary policy settings are necessary to reduce inflation, while avoiding unnecessary instability in output, employment, interest rates and the exchange rate," minutes from the committee meeting said.
The RBNZ statement said the committee agreed that interest rates will need to remain at a restrictive level for the foreseeable future to ensure consumer price inflation returns to the target range of 1-3%.
Its comments were in line with caution globally around cutting rates too soon while central banks gather more evidence that inflation is moving lower.
The RBNZ added the balance of risk was little changed since the February statement. It does not release updated economic indicators or the forecast official cash rate track at Monetary Policy Reviews (MPR).
There was not much market reaction, with the New Zealand dollar NZD=D3 little changed on the day after reversing an uptick seen immediately after the decision.
A front-runner in withdrawing pandemic-era stimulus among its peers, the RBNZ has battled to curb inflation, lifting rates by 525 basis points since October 2021 in the most aggressive tightening since the official cash rate was introduced in 1999.
New Zealand's annual inflation has come off in recent months and is currently 4.7%, with the central bank forecasting it will return to its target band this calendar year.
The rate hikes have sharply slowed the economy with recent data showing that New Zealand tipped into a technical economic recession in the fourth quarter of 2023.
