The Reserve Bank of Australia decided to maintain the cash rate at 1.50% on the back of higher commodity prices and an expected increase in inflation.
The central bank said commodity prices have increased from the previous year, providing a boost to Australia's economy. The domestic market's transition into lower levels of mining investment following the mining boom is also nearly complete. Business investments in other parts of the country not directly hit by the decline in mining investment have also picked up.
Meanwhile, inflation is expected to increase gradually as the economy strengthens. The central bank expects economic growth to increase to around 3% in the coming years.
In the housing market, the central bank said recent supervisory measures should help address the risks associated with high and rising levels of indebtedness. It also noted that banks have already increased mortgage rates to address the situation.