Reserve Bank keeps OCR on hold

Bollard held his official cash rate (OCR) unchanged at its 2.5% record low and said the outlook remains consistent with his June monetary policy statement. There was minimal reaction in financial markets.

"The Reserve Bank's outlook is broadly unchanged. They expect the recovery to be modest and the rebuilding activity in Christchurch will underpin the recovery," says Christina Leung, an economist at ASB Bank.

Doug Steel at Bank of New Zealand says some economic numbers since the June statement have been a little stronger and some a little weaker than the central bank expected but, overall, the economy is developing as expected.

"All in all, it's all about watching Europe," Steel says.