The Reserve Bank has left the cash rate at its record low of two per cent, but continued low inflation could trigger another cut.
RBA governor Glenn Stevens was upbeat about future economic growth, noting evidence that non-mining parts of the economy strengthened in 2015.
"The board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target. The board therefore decided that the current setting of monetary policy remained appropriate," he said in a statement.
However, he said the RBA would be keeping an eye on the low inflation rate.
"Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand," Mr Stevens added.
The official interest rate has been sitting at two per cent since last May.
