Australia's central bank maintained its benchmark cash rate at 2.0 percent, as expected, and struck a neutral tone in its guidance by saying it would rely on data on economic and financial conditions to judge "whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target."
The Reserve Bank of Australia (RBA), which has cut its rate twice this year by a total of 50 basis points, said due to last month's rate cut it was appropriate to leave the rate steady today.
RBA Governor Glenn Stevens said Australia's economy was likely to continue to have spare capacity for some time and during such circumstances monetary policy needs to be accommodative to support borrowing and spending.
With the economy operating below full capacity and slow growth in labour costs, inflation is forecast to remain consists with the RBA's target over the next one to two years, even with a lower exchange rate, Stevens said.
Australia's consumer price inflation eased to 1.3 percent in the first quarter, down from 1.7 percent in the fourth quarter, and below the RBA's target of 2 to 3 percent.
Australia's Gross Domestic Product rose by 0.5 percent in the fourth quarter of 2014 from the third quarter for annual growth of 2.5 percent, slightly down from 2.7 percent expansion in both the third and second quarters, but well below 3.5 percent in the first quarter.
The unemployment rate rose to 6.2 percent in April from 6.1 percent in March but was unchanged from 6.2 percent in February.
Since mid-May the Australian dollar, known as the aussie, has resumed declining after strengthening in April on expectations that the RBA may have ended its easing cycle. Today the aussie was trading around 1.31 to the U.S. dollar for a drop of 6.8 percent since the start of the year, and a level not seen since 2009.
The Reserve Bank of Australia issued the following statement by its governor, Glenn Stevens:
"At its meeting today, the Board decided to leave the cash rate unchanged at .