"Scope" for further rate cuts if needed: RBA

The Reserve bank has left the door open to further rate cuts if needed.

"The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand," said RBA governor Glenn Stevens as part of his monetary policy decision statement.

"At today's meeting, the Board judged that it was prudent to leave the cash rate unchanged. The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target over time."

Much will depend on the performance of Australian dollar and the non-mining sectors of the economy:

"While the near-term outlook for investment outside the resources sector is relatively subdued, a modest increase is likely to begin over the next year," he said.

Further on Stevens said:

"There are a number of indications that the substantial easing of monetary policy during late 2011 and 2012 is having an expansionary effect on the economy.

"Further such effects can be expected to emerge over time. On the other hand, the exchange rate, which has risen recently, remains higher than might have been expected, given the observed decline in export prices. The demand for credit has also remained low thus far, as some households and firms continue to seek lower debt levels," he said.

Economists polled by Bloomberg don't expect another rate cut until June at the earliest.