The Reserve Bank has left the official cash rate (OCR) unchanged at 5.5 percent, as expected.

The central bank (RBNZ) reaffirmed its July stance that the OCR was high enough to keep slowing inflation and the economy.

"The committee agreed that the OCR needs to stay at restrictive levels for the foreseeable future to ensure annual consumer price inflation returns to the 1 to 3 percent target range," the Monetary Policy Committee said in a statement.

It said inflation, currently at an annual rate of 6.0 percent, was expected to keep falling as would inflation expectations, with a slowing global economy, cooler labour and housing markets.

It maintained its previous forecast that inflation would be back in the target band in the second half of 2024, but warned that domestic core inflation pressures remained strong.

"Headline inflation and inflation expectations have declined, but measures of core inflation remain too high.

"The committee agreed that the current level of the OCR remains contractionary and is constraining domestic spending as needed."

However, the committee also noted that economic activity and inflation pressures were likely stronger than expected in the three months ended June, and it raised its third quarter inflation forecast to 2.1 percent rise in consumer prices from 1.8 percent, while pushing out

its recession forecast to be in the third and fourth quarters of the year.

The RBNZ forecast track for the OCR was pushed out slightly implying little chance of a rate cut before then end of next year.

A minority view among economists was that the RBNZ will be forced to tackle stubborn inflation pressures with another 25 basis point rise to 5.75 percent, probably in November.

The RBNZ made 12 consecutive rate rises between October 2021 and May 2023, lifting the OCR from a record low of 0.25 percent to a 14-year high of 5.5 percent.

But the central bank signalled in May it felt it had done enough to get inflation back into the 1-3 percent target band, and would adopt a "watch, worry, and wait" approach.

Economists had been unanimous in expecting the RBNZ to hold rates steady this week.