The Pound New Zealand Dollar (GBP/NZD) exchange rate held steady this morning, with the pairing now trading around NZ$2.01 as the risk-sensitive "Kiwi" continues to be held back by rising concerns over China's coronavirus outbreak.
That is compared with the previous statements, where employment was said to be "around" the maximum sustainable level and inflation was "below" the target range. "The Committee agreed that ongoing low interest rates were needed to keep inflation and employment close to their mandated targets".
"Nevertheless, some sectors are being significantly affected".
However, Orr said policy can be adjusted if the impact looks more deep-seated and longer lasting.
Kiwi consumer inflation is also higher than Australia's CPI which is another reason why the RBA will be keeping rates low.
He said the impact of the coronavirus has raised uncertainty at home and overseas, but is expected to be short lived. There were also indications household spending growth will increase, the bank said.
Any further signs of deterioration in the UK's growth figure, however, would prove Pound-negative as the British economic outlook continue to darken. The widespread travel ban may make it worse for New Zealand's economic growth, Prime Minister Jacinda Ardern commented.
The odds of a rate cut later this year have risen to more than 50% from about 40% at the start of 2020, swaps data show. Slower global growth over 2019 acted as a headwind to domestic growth. "In addition, competitive pressures and recent subdued business confidence have suppressed business investment".