The Reserve Bank of New Zealand (RBNZ) on Wednesday kept its interest rate unchanged at 2.25% as widely expected by analysts.

The RBNZ Graeme Wheeler said that New Zealand's economy was supported by strong inward migration, construction activity, tourism, and the central bank's accommodative monetary policy.

He pointed out on Wednesday that further monetary policy easing was possible.

"Further policy easing may be required to ensure that future average inflation settles near the middle of the target range," he said, adding that the monetary policy will depend on the incoming economic data.

Wheeler noted that the New Zealand dollar was "higher than appropriate", adding that a weaker currency was desirable.

The RBNZ governor also said that inflation was low, driven by lower prices for fuel and other imports, but long-term inflation expectations were well-anchored at 2%.

Wheeler pointed out that there were risks to inflation forecasts from the possible high net immigration and pressures in the housing market.

The RBNZ lowered its interest rate to 2.25% from 2.50% in March. This decision was not expected by market participants.