The Reserve Bank of Australia (RBA) decided on Tuesday to leave the cash rate unchanged at 2.5 percent at its December board meeting.
The central bank decision to keep its policy rate on hold was widely expected by economists.
The RBA's most recent cut came in August when it reduced the rate by 25 basis points.
In a statement accompanying the decision, RBA Governor Glenn Stevens said the Australian economy had been growing a bit below trend over the past year, with the jobless rate edging higher.
"This is likely to persist in the near term, as the economy adjusts to lower levels of mining investment," he said.
"Further ahead, private demand outside the mining sector is expected to increase at a faster pace, though considerable uncertainty surrounds this outlook."
Stevens said the Australian dollar is still "uncomfortably high ", despite falling recently.
"A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy," he said.
"At today's meeting, the Board judged that the setting of monetary policy remained appropriate."
The RBA board will continue to assess the outlook and adjust policy as needed, Stevens said.