The Reserve Bank of Australia yesterday left its official cash rate unchanged at 3.5%, 1% above the current New Zealand 2.5% OCR.
Governor Glenn Stevens said in a statement growth in the world economy had softened after having picked up in the early months of the year.
"Current assessments are that global GDP will grow at no more than average pace in 2012.
"Most commodity prices have declined, which has helped to reduce inflation and provided scope for some countries to ease macroeconomic policies. Australia's terms of trade peaked nearly a year ago, though they remain historically high."
In Australia, most indicators suggested growth close to trend overall, he said. Labour market data showed moderate employment growth, even with job shedding in some industries, and the rate of unemployment had so far remained low.
Inflation remained low, with underlying measures near 2% in the year to June, with headline CPI inflation lower than that, Mr Stevens said.
"The effects of the price on carbon will start to affect these measures over the next couple of quarters."
The Reserve Bank's assessment of the outlook for inflation was unchanged. It was expected to be consistent with the 2%-3% target over the next one to two years.
