* RBNZ says appropriate for rate to be held steady
* RBNZ says outlook consistent with its view in June
* NZ dollar nudges higher, debt futures barely moved
* Analysts expect next rate rise in 2013
WELLINGTON, July 26 (Reuters) - New Zealand's central bank held its official cash rate (OCR) at a record low for an 11th consecutive meeting and gave no hint of any urgency to alter policy with the economy growing modestly in the midst of the euro zone debt crisis.
The Reserve Bank of New Zealand (RBNZ) said in a brief statement that it remained "appropriate" for the OCR to be held at 2.5 percent, where it has been since March 2011.
"The bank continues to expect economic activity to grow modestly over the next few years," outgoing RBNZ Governor Alan Bollard said, pointing to an improving housing market and the $16 billion rebuilding of earthquake damaged Christchurch.
Bollard, to be replaced by former World Bank official Graeme Wheeler in September, said the economic outlook was consistent with the bank's June assessment, when it signalled rate rises would most likely start in the second quarter of 2013.
Thursday's decision was no surprise, after annual inflation slowed to 1.0 percent in the April-June period, the lowest annual pace in nearly 13 years, and at the bottom of the RBNZ's target band.
Analysts said the next move will likely be a rise, but the benign inflation, patchy activity and growing risk in the euro zone, will stay the bank's hand.
"March is still the earliest we see the RBNZ lifting the OCR, with Europe skewing the risks to a later start," said ASB bank chief economist Nick Tuffley.
Market reaction to the statement was muted, with the New Zealand dollar edging up around 20 points to a high of $0.7910 before settling back around $0.7900. Interest rate futures were largely unmoved.
The bank noted the exchange rate was one factor constraining growth. The trade-weighted kiwi, the RBNZ's preferred currency measure against a basket of currencies, is up about 5 percent from a five-month low in May.
While the currency strength is weighing on export earnings, it is also keeping import prices and inflation pressures low.
OUTLOOK MODEST AND MIXED
Recent data have shown the economy growing modestly, but activity is uneven, consumer and business confidence has softened, households remain cautious with spending, and the jobless rate is stubbornly high.
In addition, the government is firmly sticking to belt-tightening to bring the budget back into the black by 2015.
But there have been signs of a pick-up in the housing market, with prices hitting record levels in some cities, and non-tradable inflation -- a barometer of domestic price pressures -- up 2.4 percent in the year through June.
A Reuters poll taken after the latest rate review showed analysts divided over when the first rise will come, between the first and second quarters 2013, while two see it in early 2014.
All those polled see no chance of a rate change at the September review. "The risk is that the first rate hike is pushed out to Q3 next year," said Citi head of market economics Paul Brennan.
In contrast, financial market pricing based on interest rate swaps reflects the global risks with the chances of a rate cut in September put at 37 percent, but with only 13 basis points of rate cuts factored in over the next 12 months.
New Zealand's key rate lags Australia's 3.5 percent level but outstrips the 0-0.1 percent in Japan, 0.75 percent in the euro zone, and 0-0.25 percent in the United States, thus drawing yield-hungry investors and underpinning the kiwi dollar.
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