The Reserve Bank of Australia announced on Tuesday it had decided to leave the cash rate unchanged at 2.5 percent.
The decision was widely expected, with all 13 economists surveyed by the Australian Associated Press forecasting rates to remain unchanged at 2.5 percent at bank's February board meeting.
The central bank last cut the cash rate in August 2013 by 25 basis points.
In a statement released on Tuesday, Governor Glenn Stevens of the bank said interest rates are likely to stay where they are for some time.
"On present indications, the most prudent course is likely to be a period of stability in interest rates," Stevens said.
"In the board's judgment, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target."