RBA statement read: "The board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate."
On China: "China's growth has moderated to a more sustainable pace, but does not appear to be slowing further. Conditions in other parts of Asia have recovered from the effects of last year's natural disasters, though the ongoing trend is unclear and could be dampened by the effects of slower growth outside the region."
ON Europe: "The most significant area of weakness continues to be Europe, where economic activity has been contracting and policymakers confront the very difficult task of seeking to put both bank and sovereign balance sheets onto a sound footing, while promoting conditions for improved long-term growth."
On prospects of growth: "In Australia, most indicators suggest growth close to trend overall. Labour market data show moderate employment growth, even with job shedding in some industries, and the rate of unemployment has thus far remained low."
On inflation: "It remains low, with underlying measures near 2 per cent over the year to June, and headline CPI inflation lower than that. The effects of the price on carbon will start to affect these measures over the next couple of quarters. The Bank's assessment of the outlook for inflation is unchanged: it is expected to be consistent with the target over the next one to two years. Maintaining low inflation over the longer term will, however, require growth in domestic costs to continue their recent moderation as the effects of the earlier exchange rate appreciation wane."
On the AUD, RBA remains discontent, saying "the exchange rate...has remained high, despite the observed decline in the terms of trade and the weaker global outlook."
On a possible intervention, IFR Markets comments: "The RBA faces a higher AUD/USD than the RBA’s Terms of Trade model would suggest, the dampening affects of the higher AUD on prices which now threatens an inflation undershoot and business/industry struggling to adjust to the affects of a higher AUD, uncertain global growth outlook, as well as a carbon tax. Against such a backdrop it is not hard to imagine that the RBA Board is very close to endorsing a decision that authorizes the RBA to 'seek opportunities to dampen further topside moves in the AUD'. Its been done before."