The Reserve Bank of Australia (RBA) kept its interest rate unchanged at 2.00% on Tuesday. This decision was expected by analysts.
The RBA Governor Glenn Stevens said that the board' decision was appropriate at this meeting.
He pointed out that further interest rate cut is possible.
"Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand," the RBA governor said.
Stevens also said that the growth in the non-mining parts of the Australian economy strengthened in 2015, while employment picked up and that the unemployment rate fell.
The RBA governor also said that "consumer price inflation is likely to remain low over the next year or two", adding that the monetary policy should be accommodative.
Stevens noted that the Australian dollar was adjusting to the evolving economic outlook.