The Australian central bank maintained its cash rate at 1.50%, as expected, saying the low level of interest rates continues to support the country's economy.
"Holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time," said Reserve Bank of Australia Governor Philip Lowe. The cash rate has been at its current level for 25 consecutive months.
The RBA expects "further progress" in bringing the inflation rate, which is at around 2%, back to the target of 2% to 3%, although this will likely be gradual. The central bank also sees the unemployment rate, which has fallen to its lowest level in nearly six years at 5.3%, to gradually fall further to around 5% over the next couple of years.
The central bank also expects inflation climbing higher in 2019 and 2020 than its current level, although headline inflation in 2018 will likely come in a little lower at 1.75% due to one-off declines in some administered prices in the September quarter.
The Australian economy is expected to grow at an average of "a bit above 3%" in 2018 and 2019, according to the RBA, after an estimated expansion at an above-trend rate in the first half of 2018. The central bank said economic growth is being supported by positive business conditions, higher levels of public infrastructure investment, and resource exports growth.
However, the RBA flagged that outlook for household consumption remains a "continuing source of uncertainty," amid a slow growth in household income and high debt levels.