"Most information on the Australian economy continues to suggest growth close to trend overall," Stevens said. While labour market conditions softened during 2011 and the unemployment rate rose slightly, it has steadied in recent months.
Interest rates for borrowers have generally risen slightly since the RBA board's previous meeting in early February, when it also held the cash rate steady, but remain close to their medium-term average, he said.
"Credit growth remains modest. Housing prices have shown some sign of stabilising recently, after having declined for most of 2011, but generally the housing market remains soft."
The Australian dollar has risen in recent months even though the nation's terms of trade have declined, Stevens said.
While Europe will remain "a potential source of shocks" for some time yet, the acute financial pressures on European banks have alleviated considerably and financial market sentiment has improved in recent weeks with those banks lending again, albeit at higher interest rates.
The world economy will likely grow at a below-trend pace this year "but that does not suggest a deep downturn is occurring," Stevens said.
The US economy is growing moderately and while growth in China has moderated as intended, "on most indicators (it) remains quite robust overall."
While the RBA's decision to remain on hold in February shocked financial markets,
Annette Beacher at TD Securities said data over the last month doesn't satisfy the RBA's "weaken materially" criteria and the debate is now shifting to whether the RBA needs to cut rates further.
Scott Haslem at UBS Australia, who expects the RBA to remain on hold for the rest of the year, said the central bank sounded more neutral today than last week, illustrated by Stevens' comment that a deep global downturn doesn't appear to be happening.
