The Reserve Bank of Australia (RBA) has kept the official cash rate steady at 2.25 per cent.
The statement on Monetary Policy by Glenn Stevens conceded GDP growth is below trend and says the potential for easing of policy in the future remains open.
The move follows a cut last month which took the market by surprise after 16 months of stability at 2.5 per cent.
Today’s statement noted the continued decline in commodity prices reflecting lower demand and increases in supply.
Australia’s hot housing sector was also highlighted and the bank says it’s working with other regulators to assess and contain economic risks that may arise from the housing market.
The RBA governor says the unemployment rate has moved higher over the past year and that the economy is likely to have spare capacity for some time yet.
The Australian dollar jumped on the news, pushing to $US0.7813.
