The Reserve Bank of Australia (RBA) said on Tuesday it would not close off the possibility of another interest rate cut but would rather let a lower Australian dollar boost the economy.
In the minutes of its December board meeting released on Tuesday, the RBA said it decided to leave the cash rate unchanged at 2.5 percent in December to allow the effect of low interest rates to work through the economy.
"The Board's judgment remained that, given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady while continuing to gauge the effects of earlier reductions, but not to close off the possibility of reducing it further," the RBA said in the minutes.
The central bank said it continued to be concerned with the still-high Australian dollar.
"While the exchange rate had depreciated over the month, members agreed that it remained uncomfortably high and a lower level would likely be needed to achieve balanced growth in the economy," the RBA said.
The central bank also said it observed the stimulatory effects of the record low cash rate seen "most notably in the housing market".