SYDNEY, Feb. 4 (Xinhua) -- The Reserve Bank of Australia (RBA) announced Tuesday that it will keep the nation's record low cash rate of 0.75 percent on hold, despite a number of international and domestic factors which have impacted economic growth.
Although the move fell in line with most economists' expectations, in the later months of 2019 markets were already pricing in an interest rate cut.
But with better-than-expected employment figures and a pick in inflation, the chance of a February rate cut largely diminished.
"Inflation remains low and stable," RBA Governor Philip Lowe said in Tuesday's monetary policy statement.
"Over 2019, Consumer Price Index (CPI) inflation was 1.8 percent and underlying inflation was a little lower than this."
"The central scenario is for CPI inflation to be around 2.0 percent in the near term and to fluctuate around that rate over the next couple of years."
With the nation's unemployment dropping to 5.1 percent in December, Lowe said "it's expected to remain around this level for some time, before gradually declining to a little below 5.0 percent in 2021."
Despite these more positive signs however, the Australian economy still faces a number of challenges in 2020 as the country counts the cost of the horrific bushfire season.
"The household sector has been adjusting to a protracted period of slow wages growth and, last year, to a decline in housing prices, with the result that consumption has been quite weak."
In response to the announcement, the Australian dollar jumped to 67.18 U.S. cents immediately after the read at 2:30 p.m. local time, up from 66.88 U.S. cents moments before.