The Reserve Bank of Australia has kept the cash rate unchanged at 4.75 per cent, at its regular monthly board meeting.
The decision was expected, with economists predicting the RBA would keep rates on hold.
RBA governor Glenn Stevens said inflation was consistent with the bank's medium-term objective of monetary policy, having declined significantly from its peak in 2008.
"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," Mr Stevens said.
The board of the central bank last raised interest rates in November last year.
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Overall, financial conditions remain accomodative for the global economy, Mr Stevens said.
"The global economy is continuing its expansion, led by very strong growth in the Asian region. The recent disaster in Japan will have a noticeable effect on Japanese production in the near term, although the impact on the broader Asian region is expected to be limited," he said.
Although Australia's recent natural disasters have reduced output, production levels should recover over the coming months, and there will be a mild boost to demand from the rebuilding efforts as they begin, Mr Stevens said.
