The Reserve Bank has left the cash rate at a record low of two per cent for a 12th straight month, but has flagged concern about the high-flying currency.
RBA governor Glenn Stevens warned that the rising Australian dollar could threaten the non-mining economy's recovery.
"Under present circumstances, an appreciating exchange rate could complicate the adjustment under way in the economy," he said in a statement after the RBA's monthly board meeting on Tuesday.
The Aussie has spiked seven per cent since the March board meeting, which Mr Stevens attributed to rising commodity prices and "monetary developments elsewhere in the world".
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The central banker was positive about prospects for the domestic economy but warned tepid inflation provides scope for a future cut.
"New information should allow the board to assess the outlook for inflation and whether the improvement in labour market conditions evident last year is continuing," Mr Stevens added.
The official interest rate has been sitting at two per cent since last May.
