RBA plays it safe with OCR

If the announcement by the Reserve Bank of Australia leaves Australians in the dark about the outlook for interest rates, the chances are the central bank is also fumbling for the light switch.

The announcement by RBA governor Glenn Stevens, after its board's monthly monetary policy meeting yesterday, confirmed expectations that the cash rate would stay at 3.5 per cent.

It's been at that level since the drop from 3.75 per cent in June extended the cuts since early November to a full percentage point.

But there was nothing in the statement pointing to a likely cut in the near future.

The statement summarised the RBA's current assessment in its final paragraph, saying 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".

There was the now-standard warning that domestic costs would have to shoulder more of the effort of keeping inflation under control. And there was the routine acknowledgement of the "very difficult task" facing Europe's policymakers.

If, a year from now, the cash rate is still at 3.5 per cent, no one will be able to point to the statement yesterday and claim they were misled.

- AAP