The Reserve Bank of New Zealand (RBNZ) released its interest rate decision on Wednesday. The RBNZ kept its interest rate unchanged at 2.75% as widely expected by analysts.

The central bank noted that further monetary policy easing is possible, but it will depend on the incoming economic data.

"To ensure that future average CPI inflation settles near the middle of the target range, some further reduction in the Official Cash Rate (OCR) seems likely," the RBNZ Governor Graeme Wheeler said.

He noted that the inflation was below the 1%-3% target range, driven by earlier strength in the New Zealand dollar and lower global oil prices. Wheeler expects the inflation to return within the target range by early 2016.

The RBNZ governor also said that strong house price inflation in Auckland is a risk to financial stability.

Wheeler noted that the recent rise in diary prices was contributed to improved household and business sentiment.