The Reserve Bank of Australia (RBA) says further rate cuts could be considered in coming months.
In the minutes of its November 6 meeting, released on Tuesday, the RBA said improved conditions in the global economy and hints of higher inflation had prompted it to keep the cash rate unchanged at 3.25 per cent.
"Members considered that further easing may be appropriate in the period ahead," the RBA said.
"However, with prices data for the September quarter slightly higher than expected and recent information on the world economy slightly more positive, the board judged that the stance of monetary policy was appropriate for the time being."
Data from China and the US, in particular, suggested that things were improving in those countries, the RBA said.
"The pace of growth in China appeared to have stabilised in response to the earlier fiscal and monetary stimulus, with a pickup in infrastructure construction," it said.
"The US economy continued to expand at a moderate pace.
"Growth in GDP (gross domestic product) and consumption picked up a little in the September quarter, although business investment had weakened."
US housing and employment data also suggested that a recovery was underway.
Stronger-than-expected September quarter inflation figures had also strengthened the case for keeping the cash rate steady.
"The headline CPI (consumer price index) rose by 1.2 per cent in the September quarter on a seasonally-adjusted basis, and was two per cent higher over the year," the RBA said.
"These outcomes reflected, in part, the introduction of the carbon price, which had had a noticeable effect on electricity and gas prices."
Aside from the carbon price effect, underlying inflation was expected to stay close to 2.5 per cent over the coming two years, although that would depend on ongoing productivity growth and further moderation in wages growth, the RBA said.
The bank was also waiting to see how May, June and October's rate cuts would play out in the economy.
"Further effects of these changes were yet to be observed," the RBA said.