The Reserve Bank of Australia left the cash rate at 2.75% for a second month on Tuesday, but indicated that there is scope for further cuts.
It noted the Australian dollar still remains high, despite depreciating about 10% since early April.
"It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy," RBA governor Glenn Stevens said in statement.
Otherwise, AAP reports, the board decided policy remained appropriate for now.
"The board also judged that the inflation outlook, as currently assessed, may provide some scope for further easing, should that be required to support demand," Mr Stevens said.