RTTNews - Tuesday, the Reserve Bank of Australia retained its cash rate at 3% as expected. The official cash rate now stands at its lowest level in 49 years.

RBA Governor, Glenn Stevens said, The Board's current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed. He added, In assessing how it might use that scope, the Board will continue to monitor how economic and financial conditions unfold and how they impinge on prospects for a sustainable recovery in economic activity.

Australian economic conditions have to date not been as weak as expected a few months ago. However, output was sluggish and capacity utilization fell back to near average levels. The Board sees further decline over the rest of the year. Again, weak demand for labor is lowering labor cost growth. These conditions should see inflation continue to abate over the period ahead, Stevens said.

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