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The Reserve Bank of Australia has kept interest rates on hold at a historic low of 1.75 per cent as widely expected.
In a statement, Reserve Bank governor Glenn Stevens said while the global economy was continuing to grow, it was doing so at a lower-than-average pace.
“In Australia, recent data suggests overall growth is continuing, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend,” he wrote.
The Australian dollar jumped on the news. It was trading at 73.7 US cents prior to the release, and is now buying 74.1 US cents.
Last month the RBA moved to head off fears about deflation, cutting its official cash rate by 25 basis points.