Australia's central bank held interest rates steady at the all-time low of 1.75% today following strong growth figures, while keeping an eye on low inflation.
The Reserve Bank of Australia cut the official cash rate from 2% last month to spur the economy, but gave little indication of further easing in a statement today.
"The board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time," Governor Glenn Stevens said.
Lower than expected inflation prompted the central bank to make its first rate cut in a year last month, a move seen as keeping a lid on further appreciation in the Australian dollar.
The central bank said today that inflation remained "quite low" and was expected to stay that way for some time given subdued growth in labour costs and low cost pressures elsewhere in the world.
Australia is enjoying growth which outstrips some of the world's most advanced economies.
Last week it defied market forecasts by reporting an annual year-on-year reading of 3.1% in the first quarter on the back of strong exports.
The RBA said that lower interest rates had supported domestic demand and were helping trade - factors which were assisting the economy to make needed adjustments as it exits a mining investment boom.
Stevens said recent data suggested overall growth was continuing despite a large decline in business investment, but noted room for optimism in areas outside exports.
"Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend," he said. "Labour market indicators have been more mixed of late, but are consistent with continued expansion of employment in the near term," he added.
Economists had widely expected rates to stay on hold after last month's cut, potentially until the next inflation data due in late July.
