WELLINGTON, Oct 31 (Reuters) - The New Zealand central bank held its benchmark cash rate steady at 2.5 percent on Thursday, as expected, and repeated its warning that higher rates will be needed next year to cope with an expected lift in inflation pressures from the housing and building sectors.
It also said that the New Zealand dollar was high, while adding that it gave flextibility of rate rises.
For the text of the Reserve Bank of New Zealand's (RBNZ) latest statement click on.
All 16 analysts in a Reuters poll expected no change at this review, with two seeing a rise in the final quarter this year, and the remaining 14 looking at the first quarter of 2014.
The RBNZ has said the domestic economy is improving with consumers spending more, and earthquake reconstruction in Christchurch gathering pace, but also voiced its concerns about rising house prices and the risk to inflation and financial stability.
Financial market pricing before Thursday's decision implied no chance of a 25 basis points rate move, and 76 basis points of hikes over the next 12 months.
The official cash rate has been held at 2.5 percent since an emergency 50 basis point cut in March 2011 after the earthquake.
The bank placed restrictions on trading banks on Oct 1, limiting how much they can lend for low deposit-high value mortgages in a bid to slow house price rises.
New Zealand's official rate compares with Australia's 2.50 percent, the U.S. Federal Reserve's 0.0/0.25 percent, the European Central Bank's 0.5 percent, and the Bank of Japan's 0/0.1 percent.
(Gyles Beckford) Keywords: NEWZEALAND ECONOMY/RATES
(Gyles.Beckford@thomsonreuters.com)(+64 4 802 7977)(Reuters Messaging: email@example.com)
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