The Reserve Bank of Australia (RBA) kept its interest rate unchanged at 2.00% on Tuesday. This decision was expected by analysts.

The RBA Governor Glenn Stevens said that the board' decision was appropriate at this meeting.

He pointed out that further interest rate cut is possible.

"Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand," the RBA governor said.

Stevens also said that the Australian economy continued to recover moderately, and that the employment grew strongly.

He noted that the Australian dollar was adjusting to the significant drop in key commodity prices.