2 Oct 2013

Interest rate held by RBA

9:07 am on 2 October 2013

The Reserve Bank of Australia left official interest rate unchanged at 2.5% on Tuesday.

In a statement, Reserve Bank Governor Glenn Stevens said Australia's economy continues to grow at below trend pace.

"This is expected to continue in the near term as the economy adjusts to lower levels of mining investment," he said.

"The unemployment rate has edged higher. There has been an improvement in indicators of household and business sentiment recently, though it is too soon to judge how persistent this will be.

"Inflation has been consistent with the medium-term target."

The ABC reports the RBA has left room for more rate cuts.

"The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target," the statement said.

In August, the Bank cut the cash rate by 25 basis points to its lowest level since 1960. The reduction was the eighth since November 2011, when the rate was lowered to 4.5%.