The Reserve Bank of Australia (RBA) left its cash rate unchanged at 2 percent on Tuesday, judging that the prospects for the economy had improved recently.
The RBA's decision was along expected lines. None of the economists polled by Reuters had expected a change.
The central bank noted that a moderate expansion in the economy continued despite a sharp fall in commodity prices that has hurt Australia's trade sector.
"While GDP growth has been somewhat below longer-term averages for some time, business surveys suggest a gradual improvement in conditions in non-mining sectors over the past year," the central bank said. "This has been accompanied by stronger growth in employment and a steady rate of unemployment."