Australia's central bank left its benchmark cash rate steady at 2.0 percent, saying the prospects for improved economic conditions had "firmed a little over recent months," but the outlook for inflation may "afford scope for further easing of policy, should that be appropriate to lend support to demand."
While the Reserve Bank of Australia's (RBA) reference to improved economic conditions and scope for easing is new, it also repeated that it would continue to assess the outlook to determine whether the current policy stance was consistent with its targets for growth and inflation.
In his statement, RBA Governor Glenn Stevens acknowledged the recent increase in home loan rates as "slightly" reducing the support to borrowing and spending, but added that overall financial condition were "still quite accommodative."
A hike in as mortgage rates by some of Australia's banks had ignited speculation the RBA would cut rates to counter any monetary tightening.
However, Stevens also said surveys had suggested a "gradual improvement" economic conditions over the past year, a slightly more upbeat view than in recent months when Stevens merely said that the moderate economic expansion was continuing, accompanied by rising employment.
Stevens also appeared more optimistic about the rise in house prices in Melbourne and Sydney, saying the pace of growth had moderated of late. In recent months the RBA also only said that house prices were continuing to rise strongly in the country's two largest cities.
Australia's inflation rate was steady at 1.5 percent in the third and second quarters while Gross Domestic Product expanded by only 0.2 percent in the second quarter from the first for annual growth of 2.0 percent, down from 2.5 percent in the first quarter.
The unemployment rate was unchanged at 6.2 percent in September.
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 2.0 per cent.