New Zealand holds benchmark rate at record low

WELLINGTON (AFP) - New Zealand's central bank held interest rates at a record low 2.5 per cent on Thursday, citing slowing growth in China and ongoing uncertainty in Europe.

Only modest economic growth was expected in the next few years, Reserve Bank of New Zealand governor Alan Bollard said.

The official cash rate has been at 2.5 per cent since it was March last year, when it was cut in a bid to limit the impact of the devastating earthquakes that struck the south province of Canterbury.

Since then, soft global conditions, as well as the persistent strength of the New Zealand dollar, have meant the inflation outlook has remained subdued and "it remains appropriate" to keep the rate on hold, Mr Bollard said.