The Reserve Bank of Australia left its cash rate unchanged at 1.50%, saying inflation is likely to remain low for some time amid low growth in labor costs and strong competition in retailing.

Inflation is expected to gradually pick up as the Australian economy strengthens, the central bank said. CPI inflation is forecast to be a bit above 2% in 2018.

Global economic growth continues, though uncertainty regarding the direction of international trade policy in the U.S. remains, the bank added. Business conditions and the outlook for the country's labor market are positive, with the unemployment rate in Australia expected to gradually decrease after remaining steady at 5.5% for much of the past year.

"The low level of interest rates is continuing to support the Australian economy," Governor Philip Lowe noted. "Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual."