As predicted by all banks and analysts, Reserve Bank of New Zealand governor Anna Breman and her team reached consensus to leave the benchmark official cash rate at 2.25 per cent on Wednesday.
Stimulatory monetary policy is desperately required to kickstart New Zealand's economy, even as inflation ticks above the RBNZ's target band of 2-3 per cent.
Headline inflation hit 3.1 per cent across the 2025 calendar year, while on Tuesday, food prices registered 4.6 per cent growth in the 12 months to January 2026.
To that end, Dr Breman - who was appointed in September and took the helm in December - opted to side with the consensus and leave rates low.
"The past few years have been very tough on many New Zealanders, both household and businesses," she said.
"Growth has been weak, almost flat over the past few years, and inflation has been high."
Inflation was already most likely back in the target band, though that won't be known until a data release in April, she said.
"The (RBNZ) is confident that inflation will fall to the two per cent midpoint over the next 12 months due to spare capacity in the economy, modest wage growth, and core inflation within the target band," she said.
The hold marks an end to a long run of cuts, including nine of the previous 10 meetings.
Mortgage-holders hoping for the low rate to continue as long as possible were left disappointed by the forward guidance provided by the bank.
At its last review, in November last year, the RBNZ forecast it would leave rates on hold in 2026 before hiking in Q2 2027.
The new tracking gives a better than 50-50 chance of a hike late this year.
That's in line with predictions from Westpac, but not as hawkish as BNZ and HSBC, which see hikes from Q3 this year.
The Kiwi dollar fell from US60.45c to US60.15c on the announcement.
New Zealand's official cash rate sat at a wince-inducing 5.5 per cent for a year to July 2024 as Dr Breman's predecessor, Adrian Orr, fought off a post-pandemic inflation challenge.
Despite the 325 basis points of cuts over the last 18 months, the Kiwi economy is yet to take off.
Downsides to the Kiwi economy include subdued house prices, residential and business investment - which is gradually growing - and nine-year high unemployment of 5.1 per cent.
The RBNZ's statement did carry a few optimistic notes for 2026, saying the economy was at "an early stage" in a recovery.
"With ongoing strength in commodity prices, economic activity in the agricultural sector and regional New Zealand remains strong," it said.
"In response to previous cuts in the OCR, economic growth is broadening across sectors of the economy, such as manufacturing, construction and some retail. Economic growth is expected to increase over 2026."
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