Watch the Reserve Bank of New Zealand's live stream from 11am

The Reserve Bank of New Zealand has left interest rates on hold.

After weeks of strong odds on a rate cut, many economists moved to pick that Governor Graeme Wheeler would hold fire.

Market priced in a 75 per cent likelihood of no OCR cut with domestic economy looking solid and global outlook improving.

Watch: Replay of a live stream from the Reserve Bank's press conference held this morning:

The New Zealand dollar rallied by about US1c after the Reserve Bank opted to keep its official cash rate at 2.25 per cent, with the market perceiving the bank's statement as being less "dovish" than many had expected.


The Kiwi went from US70.15c just before the 9 am announcement to US71.15c just after, later easing back to US70.90.

"Basically the market is reading this as being slightly less dovish than expected," ANZ senior foreign exchange strategist Sam Tuck said. "They have highlighted the financial stability risks in the housing market and house prices in Auckland are clearly adding to the bank's financial stability concerns," Tuck said.

Read this morning's Monetary Policy Statement here.

ASB Bank said financial stability concerns appear to have influenced the decision not to cut rates. "The Reserve Bank may be stalling to allow time to introduce further macro-prudential tools," ASB economists said. They said they continue to see downside risks to the Reserve Bank's inflation outlook.

"As a result, we continue to expect the cash rate to eventually fall to 1.75 per cent, although the Reserve Bank appears very reluctant to cut rates," ASB said.

Economists at ANZ, Westpac, First NZ Capital and Deutsche Bank all thought the official cash rate will be left at 2.25 per cent - although all are picking at least one further cut is likely this year.

The RBNZ has another full monetary policy statement review in August.

Read the latest Monetary Policy Statement here: