Reserve Bank of Australia keeps cash rate at 1.5%, as expected

Australia's central bank stayed put on interest rates, as expected, even as it pointed to medium-term risks for China's economy and said a strengthening in the Aussie dollar could complicate matters.

The Reserve Bank of Australia left its cash rate unchanged at 1.50%, as expected.

Rate-setters in Sydney said conditions in the global economy had continued to improve in recent months, with above trend growth expected in various advanced economies, "although uncertainties remain".

"In China, growth is being supported by higher spending on infrastructure and property construction. This composition of growth and the rapid increase in borrowing mean that the medium-term risks to Chinese growth remain," the RBA said in a statement.

"There is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and stock markets have mostly risen," it added.

A weaker Australian dollar since 2013 was helping the economy in its transition after the China-led commodities investment boom, but "an appreciating exchange rate would complicate this adjustment".

Employment Down Under was likely to continue expanding, although labour market indicators continued to be mixed and hiring was concentrated on part-time positions, the RBA said.

Headline consumer price inflation was seen rising towards 2.0% over the course of 2017, but with underlying inflation increasing "a bit more gradually".

On the asset side of equation, the RBA said housing market conditions varied considerably around the country, with conditions strong in some areas amid brisk price increases, whereas prices were falling in others.

Considerable additional supply of apartments was expected over the next couple of years in the eastern capital cities.

Nevertheless, growth in rents is the slowest for two decades, the monetary authority said.

"Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards."

"Taking account of the available information the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."

As of 0824 GMT the Aussie dollar was 0.28% higher against the US greenback at 0.7608.