The Reserve Bank of New Zealand has held its Official Cash Rate at 2.75 per cent as widely expected, pausing its sequence of three rate cuts in quick succession to "watch and wait."But Governor Graeme Wheeler said "some further reduction in the OCR seems likely" and that the bank would need to run even lower interest rates if the New Zealand dollar continued to rebound.Only two out 11 economists had expected a cut, with most expecting a delay before a final cut to 2.5 per cent with the bank's full December 10 Monetary Policy Statement, which would fully unwind last year's 100 basis points of tightening. Some interpreted the bank's statement as making a cut in December still probable, but slightly less likely.Wheeler cited concerns about slower growth in China and East Asia and financial market uncertainty about the US Federal Reserve's long-awaited tightening, and possible monetary policy easings elsewhere.He said a sharp fall in dairy prices since early 2014 was still dragging on domestic farm incomes, but growth in the services sector and construction remained robust because of high migration, strong tourism and low interest rates."Global dairy prices have risen in recent weeks, contributing to improved household and business sentiment," Wheeler said."However, it is too early to say whether these recent improvements will be sustained," he said.Wheeler said house price inflation in Auckland remained strong and was "posing a financial stability risk", but he did not specifically link Auckland's hot housing market to his OCR decision or the risks it could spark wider inflation.That contrasts somewhat with his October 14 speech where he said: "Housing market considerations do influence our thinking on the OCR."Wheeler also made no reference in his statement today to 'keeping the Reserve Bank's powder dry' by allowing plenty of room to cut the OCR in the event of a much bigger downturn, which he also argued for in the October 14 speech.Some economists interpreted those October 14 comments as putting a harder floor under the OCR at 2.5 per cent, given some had earlier called for cuts to two per cent or even lower. Wheeler said CPI inflation remained below the one to three per cent target range, largely reflecting a combination of earlier strength in the New Zealand dollar and the 60 per cent fall in world oil prices since mid-2014. But he said it was expected to return to within the target range by early 2016 as earlier petrol price falls dropped out of the CPI series and in response to the fall in the exchange rate since April.CPI inflation has been below the mid-point of the bank's target range since September 2011 and has been below one per cent since September last year. Core inflation has been below the two per cent midpoint specified in the Governor's Policy Targets Agreement with Finance Minister Bill English since September 2011."However, the exchange rate has been moving higher since September, which could, if sustained, dampen tradables sector activity and medium-term inflation," Wheeler said."This would require