Reserve Bank of Australia board members agreed to leave interest rates unchanged but held onto an easing bias and look likely to cut rates further if the economy stumbles in the second half of 2009.
As expected, the central bank said it will keep its cash rate target steady for at least another month at a 49-year low of 3.00%. "The board's current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed," Governor Glenn Stevens said in a statement.
"In assessing how it might use that scope, the board will continue to monitor how economic and financial conditions unfold and how they impinge on prospects for a sustainable recovery in economic activity," he said.
Still, the RBA identified green shoots in the global economy, saying China's economic growth "has strengthened considerably" while the US economy "is approaching a turning point."
The central bank also highlighted an improvement in capital markets following a recent surge in capital raisings by companies. "Large firms have had good access to equity capital, which is assisting in strengthening their financial structures," Stevens said.