RBNZ decision due in three hours at 2100 GMT
The RBNZ shadow board at the New Zealand Institute of Economic Research warns against cutting rates too deeply.
They forecast at quarter-point cut today but say the falling currency could make imports more expensive and leave Wheeler in a conundrum.
"If dairy prices don't recover and drought hits we could be headed for recession and much lower rates. But if the currency keeps falling, much higher headline inflation will pose a significant challenge for the RBNZ suggesting significant upside pressure for rates even as the economy softens."
They see rates falling to 2.50% by year end from the current 3.25% level, although Westpac forecasts rates dropping all the way to 2.00% in December.
Here is a full preview of the RBNZ decision.
