The Reserve Bank says it has left its official cash rate unchanged at 2.50 percent.
Outgoing Reserve Bank Governor Alan Bollard said New Zealand's economic outlook remained broadly consistent with that described in its last monetary policy statement in June.
Bollard said in today's statement that the outlook for New Zealand's trading partners remained weak.
"Several euro-area economies are in recession and Chinese growth has slowed," he said.
"The risk of significant deterioration in the euro area persists," he said.
At home, the bank continued to expect economic activity to grow modestly over the next few years.
"Housing market activity continues to increase as forecast, and repairs and reconstruction in Canterbury are expected to further boost the construction sector," Bollard said.
"Offsetting this, fiscal consolidation is constraining demand growth, and the high New Zealand dollar continues to undermine export earnings and encourage substitution toward imported goods and services," he said.
Underlying annual inflation is expected to settle near the mid-point of the 1 to 3 percent target range over the medium term, Bollard said.
It was Bollard's last statement on the official cash rate before his replacement, Graeme Wheeler, takes over later this month.
Neither Bollard nor Wheeler have much to worry about on the inflation front.
Statistics NZ data showed that the consumers price index rose by just 0.3 percent in the June quarter.
The annual figure came to just 1 percent - the smallest annual movement since a 0.5 percent increase for the year to the December 1999 quarter - and the very bottom of the central bank's indicative range.
