The Reserve Bank of Australia (RBA), governed by Philip Lowe, maintained the cash rate at 1.50 percent as widely expected. Policymakers judged that the current stance was appropriate to maintain sustainable growth and achieve the inflation target.

In the statement that followed, RBA remained upbeat on global growth and cautiously upbeat on China. Governor Lowe reiterated that an appreciating exchange rate “would complicate” Australia’s economic transition. However, there was no change in the guidance on the currency, which suggests that the current level of the A$ is not a major issue for the RBA.

The economic outlook continues to be underpinned by the lower interest rates. The depreciation of the currency has assisted the economy in its transition following the mining investment boom.

"In spite of the recent drop in its trade surplus (back to A$1.3bn for January), the most recent pickup in GDP growth (Q4 2016 was well above expectations at 2.4%) is likely to leave the RBA comfortable with an unchanged policy path for the remainder of the year, with the risks skewed towards possible tightening," said Lloyds Bank in a report.