Australia's central bank stuck to a neutral stance on the economy and interest rates, a marked divergence from some of its peers abroad who have recently signalled an intent to tighten monetary policy.

The Reserve Bank of Australia (RBA) finished its July policy meeting with rates staying at a record low 1.5%, where it has been since August last year.

Analysts had speculated that the central bank would turn hawkish like its counterparts in Europe and Canada. Instead, its statement was anodyne. 

"The board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time," it repeated. 

Indeed, it even refrained from highlighting the recent pick up in employment, noting only that the indicators remain "mixed." 

Official data showed Australian employment blew past forecasts to jump 42,000 in May, a third month of upbeat outcomes in a row that drove the jobless rate to a four-year trough of 5.5%. 

The RBA did sound optimistic about future economic growth, but cautioned against record high household debt in the country's red-hot property market especially as wages growth was stuck at its slowest pace ever. 

The central bank fears that trend of household debt outpacing income growth was eating into spending elsewhere in the economy.

Earlier, data from the Australian Bureau of Statistics showed the country's retailers enjoyed another strong month of sales in May as shoppers splurged on household goods, a sign that the economy picked up speed after a disappointing first quarter.

Retail sales rose 0.6% in May, beating expectations for a meagre 0.2% increase. It also follows a solid 1% jump in April, marking the best two months of sales since the end of 2013. 

The data should comfort the RBA which had feared ballooning debt in the sizzling property sector was pinching consumers' ability to spend elsewhere in the economy.