The Reserve Bank, as expected, has kept its official cash rate (OCR) unchanged at 0.25 per cent and has left its bond buying cap at $100 billion in today's monetary policy report.

On March 16, amid the depths of concern about the worldwide spread of Covid-19, the central bank cut its OCR by 75 basis points to the current level and said it would remain at that level "for at least the next 12 months".

The messaging from the bank as to the OCR's future path has remained the same since March, but current market pricing suggests it may move earlier.

Analysts were expecting the bank to reiterate its March message in today's report.

True to form, the Reserve Bank said: "The Official Cash Rate (OCR) is being held at 0.25 percent in accordance with the guidance issued on 16 March."

The cap on the Large Scale Asset Purchases, or quantitative easing, programme involves the bank buying up to $100b of Government Bonds, Local Government Funding Agency Bonds and NZ Government Inflation-Indexed Bonds in the secondary market by June, 2022.

The programme aims to inject money into the economy and to lower borrowing costs to households and businesses.

With monetary policy having reached its conventional limits and unconventional monetary policy having now been deployed, the Reserve Bank is considering its next steps.

ANZ said New Zealand is in the midst of a deep recession, "the brunt of which is yet to be fully felt".

"With the OCR already very low, and quantitative easing expected to eventually reach its limits, the Reserve Bank is likely to look to use other options in its toolkit to stimulate the economy further," ANZ said.

"At present, market pricing suggests a high probability that the RBNZ will take the official cash rate negative," it said.

In today's report, the Reserve Bank's monetary policy committee said progress was being made on the Bank's ability to deploy additional monetary instruments.

These instruments include a Funding for Lending Programme (FLP) - cheap lending for banks - a negative OCR, and purchases of foreign assets.

"The committee agreed that these instruments can be mutually supportive in bolstering economic activity.

"Members also agreed that the alternative instruments can be deployed independently, and noted that the FLP would be ready before the end of this calendar year," it said.

The Reserve Bank said any significant change in the global and domestic economic outlook would remain dependent on the containment of Covid-19.

"International border restrictions will continue to significantly curtail migration and tourism, and lead to the activity outlook being uneven across industries and regions," the bank said.

"Commodity prices for New Zealand's exports remain robust, but this has been partly offset by the New Zealand dollar exchange rate moderating the return to local export producers," it said.

The New Zealand dollar has performed strongly since taking a dive in March on the back of Covid-19. It last traded at just over US66c - and was little changed by the Reserve Bank's announcement.