RBA leaves rate on hold for a seventh month

The Reserve Bank has left the cash rate at a record low of two per cent, noting that jobs growth is getting stronger.

Pedestrians are seen walking past the Reserve Bank of Australia in Sydney Source: AAP

The Reserve Bank has left the cash rate at a record low of two per cent for a seventh straight month, but has signalled that it is prepared to cut it if needed.

RBA governor Glenn Stevens said while the economy is suffering from falling commodity prices and low investment, employment growth has strengthened and the Australian dollar has stayed low.

"While Gross Domestic Product 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," he said in a statement after the RBA's monthly board meeting on Tuesday.

"Inflation is forecast to be consistent with the target over the next one to two years. In such circumstances, monetary policy needs to be accommodative."

Mr Stevens said the property markets in Sydney, Melbourne are showing signs of cooling after fears of a property bubble.

"The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities," the RBA statement read. 

The dollar remained largely unchanged at US72.69 cents after the RBA's announcement.