New Zealand's central bank left its official cash rate (OCR) unchanged at 1.75 percent on Thursday.

Global economic growth has become more broad-based in recent quarters, but inflation and wage outcomes remain subdued across the advanced economies, and challenges remain with on-going surplus capacity, Reserve Bank of New Zealand governor Graeme Wheeler said in a statement.

Bond yields are low, credit spreads have narrowed and equity prices are at record levels, Wheeler said, adding that monetary policy is expected to remain stimulatory in the advanced economies, but less so going forward.

The trade-weighted exchange rate has increased since May, partly in response to a weaker U.S. dollar, he said, adding that a lower New Zealand dollar is needed to increase tradables inflation and help deliver more balanced growth.

Gross domestic product growth in the March quarter was lower than expected, adding to the softening in growth observed at the end of 2016, Wheeler said.

"Growth is expected to improve going forward, supported by accommodative monetary policy, strong population growth, elevated terms of trade, and the fiscal stimulus outlined in Budget 2017," he said.