Aussie OCR stable at 2.5 per cent

The Australian dollar rose to US85.13c, from US84.80c immediately before the statement was released and the lowest since mid-2010. Photo / Thinkstock

The Reserve Bank of Australia said its currency, near a 4-year low, remains overvalued and needs to decline further to assist the economy, which is growing at a moderate pace.

The central bank kept its cash rate unchanged as expected at a record low 2.5 per cent, where it has been since August 2013.

Governor Glenn Stevens issued a statement broadly unchanged from his announcement at the start of last month, although he now notes the US economy is continuing to strengthen and China's economy is responding to policy "in a way that should support growth".

Stevens repeated his view that the Australian dollar had weakened recently, saying it largely reflected a stronger US dollar.

The Australian dollar rose to US85.13c, from US84.80c immediately before the statement was released and the lowest since mid-2010. The kiwi edged down to A92.53c from A92.65c and has gained 0.5 per cent against the NZ dollar this year.

He said global financial conditions remain "very accommodative and long-term interest rates and risk spreads remain very low," but he omitted his observation of last month that volatility had picked up in some markets.

Stevens reiterated that inflation was expected to be consistent with the 2 per cent-to-3 per cent target over the next two years.