"At this time there is the clear need for government policy institutions to stay on message to provide continuity and reassurance," he said.
Tuffley acknowledged the risk of a possible cut down the track "but for now, we are sticking to our call for the OCR to remain on hold through till early 2021".
Westpac Bank's chief economist Dominick Stephens noted a few elements of the domestic economy have been weaker than the Reserve Bank anticipated.
Recent weak house sales data might cause the central bank to lower its house price forecast a bit, and GDP in the December quarter was a touch weaker than the Reserve Bank's February forecast.
"But overall, the Reserve Bank can still credibly stick to the view that the economy is set to pick up this year, especially in light of very strong consumer spending and building consent numbers coming through recently," he said.
While central banks worldwide have shifted to more dovish stances, "this global economic situation is probably in line with the Reserve Bank's expectations from February, rather than being any kind of surprise", he added.
Stephens also said that the upcoming change to a monetary policy decision-making structure is another reason to expect a "steady-as-she-goes" approach from the central bank.
ANZ Bank, however, continues to expect a cut sometime around November. "As the economy fails to accelerate out of its dip, the case for easier monetary policy will become clearer," chief economist Sharon Zollner says.
"The local economy has slowed, and downside global growth risks are accumulating; the Reserve Bank will continue to acknowledge as much – as they did in February.
"However, there is a lot more data to flow under the bridge. Our call for an OCR cut in November is based on a steady accumulation of small disappointments, rather than a dramatic turn for the worse," she said.
The Reserve Bank has proposed more stringent capital requirements for the banks to provide extra protection before a crisis appears.
Harbour Asset management portfolio manager manager Shane Solly said that with 10-year NZ government bond yields at 2 per cent, it was getting more difficult for some investors to generate the income they needed.
"Bank term deposit rates are offering relatively higher income yields, but they are starting to fall with rates down 0.1 to 0.015 per cent already this year.
"Banks have been able to grow their profitability by increasing their mortgage lending into the buoyant New Zealand economy over the last few years.
"As bank mortgage book growth slows with slowing New Zealand activity banks may look to sustain profitability by dropping term deposit rates further."
Solly said there was a reasonable gap between bank term deposit rates and the Reserve Bank's official cash rates.
"We wonder whether banks will cut term deposit rates if the proposed capital adequacy changes are put in place, with banks cutting term deposit rates to increase their margins.
"Either way term deposit rates, are likely to continue to fall, and investors need to adjust their income expectations or look elsewhere to boost income generation from their investments," he said.
The Reserve Bank's decision is due at 2pm on Wednesday.
BusinessDesk, Staff Reporter
