As expected, the Reserve Bank of Australia (RBA) on Tuesday left its key cash rate at a record low of 2.5 percent, where it's been since August of last year, and suggested rates will stay on hold for a while.
In a statement, the RBA said recent data show moderate growth is occurring; while resource spending is set to fall significantly, investment outside of mining is improving. Overall, the central bank expects economic growth to be below trend in the year ahead.
The Australia dollar dipped 0.3 percent against the dollar on the news, while stock markets showed little reaction.
"I agree that [with the RBA's] view on where the economy is going. The consumer confidence numbers that we are seeing recently certainly bounced back from concerns, and there is some confidence that service-related investments are coming into play," said Tony Farnham, economist & analyst at Patersons Securities.
The RBA said the most prudent course is likely to be a period of stability for rates. But of interest is its statement surrounding the China's property market – the central bank said the weakening Chinese housing sector will be challenging for the economy in the near term.
"It goes with concerns about where China's GDP (gross domestic product) is going. We've seen a lot of relaxation in authorities [where] they'll throw stimulus at the problem but to do that, you have to consider the asset bubbles that have formed and then solve it. And that is occurring in China's property market at the moment," said Farnham.
China is Australia's biggest trade partner and the outlook for China's growth typically has implications for the economy down under.