The Reserve Bank kept the official cash rate on hold at its all-time low of 2.5 per cent yesterday but was non-committal about the future, beyond saying the outlook remained consistent with its view in the June monetary policy statement, which had implied no rise until the June quarter next year.
Although there is a limited risk the euro area's woes get a lot worse, domestically the bank continues to expect economic activity to grow modestly over the next few years, driven by increasing housing market activity and reconstruction in Canterbury.
"Offsetting this, fiscal consolidation and the exchange rate are constraining demand growth."
The policy conclusion was terse: "It remains appropriate for the OCR to be held at 2.5 per cent."
Westpac economist Michael Gordon said the bank might be reluctant to be seen as committing to any particular line, given the impending change of governor.