The Reserve Bank has held its benchmark interest rate at a record low, but signalled it will cut it if the impact of the coronavirus threatens the economy.
The Official Cash Rate was kept steady at 1.0 percent, as expected.
Economists had expected no change to rates.
Reserve Bank governor Adrian Orr said economic growth is showing signs of improved activity.
He said the impact of the coronavirus has raised uncertainty at home and abroad, but is expected to be short lived.
However, Orr said policy can be adjusted if the impact looks more deep-seated and longer lasting.
The New Zealand dollar gained nearly half a cent against the US dollar after the decision, settling at around 64.6 US cents.