Australia's central bank retained its record low interest rate for the tenth straight meeting on Tuesday but cautioned that appreciation of currency could complicate the transition of the economy.

The policy board of the Reserve Bank of Australia, headed by Glenn Stevens, left the cash rate unchanged at 2.00 percent.

Policymakers judged that there were reasonable prospects for continued growth in the economy, with inflation close to target. The board decided that the current setting of monetary policy remained appropriate.

The economy expanded at a faster pace of 3 percent in the fourth quarter. The available information suggests that the economy is continuing to rebalance following the mining investment boom.

"New information should allow the Board to assess the outlook for inflation and whether the improvement in labor market conditions evident last year is continuing," the bank said.

Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand, the RBA reiterated.

The Australian dollar strengthened recently partly reflecting some increase in commodity prices and monetary developments elsewhere in the world. An appreciating exchange rate could complicate the adjustment under way in the economy, the bank said.

Today's statement certainly does not identify a trigger level for the AUD to elicit a policy response, Bill Evans at Westpac said. The economist does not envisage a further significant surge in the AUD and remain comfortable with a steady policy outlook.

On global front, the RBA said the world economy is continuing to grow, though at a slightly lower pace than earlier expected. At the same time, China's growth rate continued to moderate.

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