Bollard holds OCR at 2.5%

"The level of the dollar in particular, is not helping the sustainability of future growth and brings with it additional economic risks," Bollard said in Wellington today, referring to the surge in the New Zealand dollar over the past four months which has hindered the prospect of a desired export-led recovery.

"The outlook remains highly uncertain" with the rise in global commodity prices not flowing into the raw materials produced domestically and "it will be some time before growth returns to healthy levels," he said.

Bollard embarked on the steepest series of cuts to the OCR in July last year, and has slashed 575 basis points from the benchmark rate as he seeks to lift the economy out of its deepest recession in more than 30 years.

The resurgence in the property market prompted Bollard to warn households against resuming a mentality of "borrow and spend" last month, and while he didn't reiterate this sentiment today, he reiterated that interest rates were higher than assumed in the central bank's forecasts.