RBNZ Governor Alan Bollard said the central bank plans to continue to lower the Official Cash Rate into the coming quarter and keep it low through 2010.

He based his decision on the fact that, while global financial markets have shown signs of stabilization and world governments are doing all they can to fix economic problems, there remains a lot of work to be done. He said there could still be some negative feedback to come that will be damaging to financial institutions.

"The timing and extent of global recovery remain highly uncertain...While the New Zealand economy has not experienced the same extreme falls in economic activity as seen in a number of our trading partners, it remains weak. Business sentiment is low, investment has been curtailed and employment reduced," he said.

The bank expects inflation to remain lower in the medium term, and does not expect a pick up in growth to "healthy levels" for some time.

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