Financial markets have effectively delivered an easing in monetary policy after inflation in the September quarter came in well below both market and Reserve Bank expectations.
Chief economist at Westpac Dominick Stephens said the fall in the New Zealand dollar, coupled with a drop in wholesale interest rates, saved the central bank from having to make an embarrassing U-turn by cutting its official cash rate.
The Reserve Bank has raised the OCR four times this year to 3.5 percent.
Inflation in the year ended September came in at 1 percent, at the bottom of the Reserve Bank's 1 to 3 percent target range.
Mr Stephens said he was not expecting a cut to the OCR but he thought the central bank would delay the next increase until September next year.
