(Adds analyst comment, market reaction)
WELLINGTON, April 18 (Reuters) - New Zealand's consumer price index (CPI) was slightly higher than expected in the March quarter, adding to the view the central bank may hold off on cutting rates again until June rather than make a move this month.
The consumer price index rose 0.2 percent in the quarter, bolstered by higher prices for cigarettes, food, as well as increased housing-related costs, Statistics New Zealand data showed on Monday.
Annual inflation was 0.4 percent. Economists polled by Reuters had forecast a 0.1 percent rise for the quarter and an annual rise of 0.4 percent.
While economists had expected inflation to be slightly more tepid, it was in line with Reserve Bank of New Zealand forecasts in the March monetary policy statement.
In March the central bank surprised markets with a 25 basis point rate cut to 2.25 percent and signaled more to come.
While most economists are expecting the next rate cut to come in June, they have not ruled out a cut at the April 28 meeting.
Monday's CPI data, however, makes that possibility more remote.
The CPI data "detracts from the case for an April official cash rate cut," said Westpac Bank Chief Economist Dominick Stephens.
While the headline number was in line with the central bank's forecast, Stephens noted an upside surprise from non-tradables inflation which was stronger than the RBNZ expected.
ASB Economist Nick Tuffley said the data also suggests the "RBNZ may see little urgency to deliver the next rate cut at the April official cash rate review, and may prefer to wait until the June monetary policy statement."
The New Zealand dollar initially rose on the data but pared those gains as global sentiment weighed and was trading at 0.6889, said ANZ Senior FX Manager Sam Tuck.
He noted market pricing has pulled back but only slightly. Ahead of the CPI data pricing indicated an 85 percent chance of a rate cut by June, but that pricing has now adjusted to a 75 percent chance.
