The Reserve Bank of Australia (RBA) has opted to the keep its interest rates at the current 4.75 percent level.
Glenn Stevens, Governor of RBA, said the bank is expecting the inflation rate to remain consistent with the target of between two and three percent over the next 12 months.
He added that inflation has "declined significantly" from its 2008 peak.
“These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices,” he said.
“Production losses due to weather are temporarily raising prices for some agricultural produce but these should fall back later in the year.”
Mr. Stevens pointed out that credit growth in the country is fairly subdued, noting that asset values remained unchanged over the last few months.