The Reserve Bank has opted to keep its official cash rate unchanged at 1.0 per cent but said the outbreak of coronavirus in China was "a downside risk" to the local economy.
The bank's decision was in line with market expectations.
Reserve Bank Governor Adrian Orr said monetary policy had time to adjust to the impact of coronavirus, if needed.
The New Zealand dollar rallied by half US cent to US64.58c in the minutes following the 2 pm release of the Reserve Bank's statement.
The central bank said economic growth is expected to accelerate over the second half of 2020 driven by monetary and fiscal stimulus, and the high terms of trade.
The outlook for government investment was stronger following the Government's announcements in December. There were also indications household spending growth will increase, the bank said.
The global economic environment has shown signs of stabilising and trade tensions have receded somewhat, it said.
"However, the COVID-19 (coronavirus) outbreak is an emerging downside risk."
"We assume the overall economic impact of the coronavirus outbreak in New Zealand will be of a short duration, with most of the impacts in the first half of 2020.
"Nevertheless, some sectors are being significantly affected."
The Reserve Bank said there was a risk that the impact will be larger and more persistent.
"Monetary policy has time to adjust if needed as more information becomes available," it said.