"The RBNZ has a substantial amount of policy stimulus to unwind, the first steps are likely to be bigger (i.e. 50 basis point moves)."

Meanwhile JP Morgan economist Helen Kevans says the central bank has "avoided being even the slightest bit hawkish in the commentary accompanying its most recent ‘no change' decision, in a bid to contain expectations of rate rises in early 2010."

It, like other economists yesterday, noted that futures market pricing already suggests a 25 basis point rate hike will be delivered by March next year.

It says the risks and uncertainties about the outlook will be considerably reduced by year-end "when the synchronised global economic recovery should have more legs and the domestic economy will be expanding at a decent clip."

"With that in mind, we expect that the RBNZ will maintain its explicit easing bias in the statements accompanying the upcoming October and December OCR announcements, before shifting to a neutral stance in early 2010.

The first OCR increases are likely to be in July.

While the Reserve Bank is maintaining its line at the moment she warns that "the RBNZ can be quick to change its policy stance."

Westpac has another, different, warning for borrowers.

It observes borrowers are gradually moving out of floating rates and returning to short-term fixed rates as they are the most favourable on offer, and will remain so for some time.

"But they're unlikely to remain at current levels once we see a more substantial shift by borrowers into these terms - in the same way that the extremely low long- term rates available prior to March didn't last for long once borrowers actually started taking them up."

It says borrowers should "seriously consider fixing now", bearing in mind that they can reduce uncertainty about future cash flows by choosing a lower interest rate today and repaying more than the minimum amount."

ANZ, on the other hand is recommending borrowers stay on floating rates to benefit from the cashflow advantage, particularly given the steepening yield curve.

It says "the market is still pricing in rate hikes too early, in our view."

BNZ Capital Markets also notes that the market runs the risk of getting ahead of itself pricing in a full 25 basis point hike in March 2010 and 200 bps of hikes by the year's end, compared to the RBNZ's 90-day bank bill projection of the first hike in late 2010."