New Zealand's central bank cut interest rates for the first time in more than four years on Thursday, trimming the base rate 0.25 points to 3.25 percent amid lower-than-expected inflation.

"A reduction in the OCR (official cash rate) is appropriate given low inflationary pressures and the expected weakening in demand, and to ensure that medium term inflation converges towards the middle of the target range," it said in a statement.

Annual inflation is currently sitting at 0.1 percent, while the bank's target is 1.0 to 3.0 percent.