The Reserve Bank has left the Official Cash Rate (OCR) at a record low 2.5 percent, as widely expected, but said risks to the outlook had risen since its last statement in December.
The central bank said growth in the New Zealand economy was expected to pick up because of high immigration, robust construction and record numbers of visitors.
But it said low inflation, weak commodity prices and an uncertain global outlook, especially in China, were risks to the economy.
"Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range," Governor Graeme Wheeler said in a statement.
He said underlying inflation was sitting around 1.6 percent, but was expected to take longer to get back to the target of 2 percent because of continuing low fuel prices.
Mr Wheeler said the Auckland housing market looked to be moderating but other areas were perking up.
"We will continue to watch closely the emerging flow of economic data."
Economists had expected no change but were looking for a softer tone that acknowledged the risks and raised the prospect of further cuts.
"We got a clearer easing bias in the RBNZ statement, but not an explicit signal that the RBNZ will necessarily cut the OCR as soon as March," ASB Bank chief economist Nick Tuffley said.
Mr Tuffley is forecasting two rate cuts later this year.
The New Zealand dollar fell more than half a cent after the Reserve Bank's statement.
The US Federal Reserve also held its benchmark rate unchanged today but signalled it too was looking anxiously at the global outlook, although it maintained a relatively upbeat view of the American domestic economy.