The Reserve Bank appears unlikely to cut rates any time soon after leaving the cash rate at a record low of two per cent for a third straight month.
In a statement accompanying the decision, RBA governor Glenn Stevens appeared more upbeat about the Australian economy.
"While the rate of growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year," he said.
An expected interest rate hike by the US Federal Reserve later this year will also help the Australia economy, he said.
A Fed rate hike will boost the US dollar and push the Australian dollar even lower, making locally produced goods more competitive with imports.
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