The Reserve Bank of Australia kept its cash rate at 1.75% at its meeting yesterday, in line with market expectations.
RBA governor Glenn Stevens said in a statement the global economy was continuing to grow, but at a slower than average pace.
Several advanced economies had recorded improved conditions over the past year, but conditions had become more difficult for some emerging market economies. China's growth rate had moderated further, although recent actions by Chinese policy makers were supporting the near-term outlook.
"Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years.''
Australia's terms of trade remained much lower than they had been in recent years, he said.
Financial markets have been volatile recently, as investors had repriced assets after the United Kingdom referendum on leaving Europe, but most markets have continued to function effectively.
Funding costs for high-quality borrowers remained low and, globally, monetary policy remains remarkably accommodative. Any effects of the referendum outcome on global economic activity remained to be seen and, outside the effects on the UK economy itself, might be hard to discern.
In Australia, recent data suggested overall growth was continuing, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, had been expanding at a pace at or above trend.
Labour market indicators had been more mixed of late, but were consistent with a modest pace of expansion in employment in the near term.
Inflation had been "quite low''. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.
Low interest rates had been supporting domestic demand and the lower exchange rate since 2013 was helping the traded sector.
"Financial institutions are in a position to lend and credit growth has been moderate. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this,'' Mr Stevens said.
