The Reserve Bank has kept the official cash rate at a record low of 1.5 per cent as widely expected.
The decision at Tuesday’s April board meeting means the cash rate has not moved in 32 months.
RBA governor Philip Lowe said higher levels of public infrastructure spending, an upswing in private investment and a strong labour market had offset the impact of the drought on farm output and weak household consumption amid declining property prices.
“The low level of interest rates is continuing to support the Australian economy,” Dr Lowe said in his statement.
“Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.”
The rate, which reflects what the central bank charges commercial banks on overnight loans and influences all other interest rates, was last cut in August 2016 and hasn’t been hiked since November 2010.
The Australian dollar was unmoved by the decision at 71.07 US cents.
The RBA’s decision came just hours ahead of the delivery of the 2019 federal budget.