The Reserve Bank of Australia (RBA) kept its interest rate unchanged at 1.75% on Tuesday as widely expected by analysts.

The RBA Governor Glenn Stevens said that the board's decision was reasonable for "sustainable growth in the economy and inflation returning to target over time".

The RBA governor said that the Australian economy continued to grow, despite a drop in business investment.

Stevens also said that domestic demand and exports rose at or above trend.

According to Stevens, labour market indicators were mixed of late, but are expected to increase in the near term.

The RBA governor also said that consumer price inflation remained "quite low", adding that inflation in Australia was likely to remain low "for some time".

The RBA cut its interest rate to 1.75% from 2.00% in May. This decision was not expected by analysts.