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The Reserve Bank of Australia has kept its cash rate unchanged at 2.5 percent, as expected, and maintained its view that the best policy setting is to maintain stability in interest rates.
Governor Glenn Stevens released a statement on the bank's monetary policy decision that is broadly unchanged from its position at the start of April, noting that policy remains accommodative enough to foster sustainable demand while keeping inflation in line with the 2 percent to 3 percent target.
"Monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target," Stevens said. "On present indications, the most prudent course is likely to be a period of stability in interest rates."
"In Australia, the economy grew at a below-trend pace in 2013," he said. "Recent information suggests moderate growth is occurring in consumer demand and foreshadows a strong expansion in housing construction."
Stevens did sharpen his view on the labour market. A month ago he said labour demand remained weak and the jobless rate was likely to creep up in the meantime. In today's statement, while noting weakness in the jobs market he added that more recently "there has been some improvement in indicators for the labour market, but it will probably be some time yet before unemployment declines consistently."
"If domestic costs remain contained, that should continue to be the case over the next one to two years, even with lower levels of the exchange rate," he said, repeating that the Australian dollar remained high by historical standards.
The Australian dollar recently traded at 92.81 US cents, from 92.80 cents immediately before the statement, having briefly spiked higher. The kiwi 93.66 Australian cents at 5pm from 93.67 cents before the statement was released.
He repeated that global growth was "a bit below trend" in 2013 but with reasonable prospects of a better outcome this year, "helped by firmer conditions in the advanced countries."
While China's growth has slowed somewhat in early 2014, it remains broadly in line with the objectives of policymakers, he said.