Statement by GlennStevens, RBA's governor

At its meeting today, the Board decided to leave the cash rate unchanged at 2.05.

The global economy is expanding at a moderate pace, with some further softening in conditions in the Asian region, continuing US growth and a recovery in Europe.

Key commodity prices are much lower than a year ago, in part reflecting increased supply, including from Australia. Australia's terms of trade are falling.

The Federal Reserve is expected to start increasing its policy rate over the period ahead, but some other major central banks are continuing to ease monetary policy.

Inflation is low and should remain so. Inflation is forecast to be consistent with the target over the next one to two years, but a little lower than earlier expected.

In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending.

Dwelling prices continue to rise in Melbourne and Sydney, though the pace of growth has moderated of late.

Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.