Fears of internal inflationary pressures and redounding volatility of global markets prompted Australia's central bank to keep the country's cash rates at its current level of 4.75 percent for the ninth straight meeting on Tuesday. This is still the highest among developed nations across the globe trudging with the slow economic recovery.

Expected by most economists, the RBA's decision reflects the tight but prudent fiscal management being implemented by the Monetary Board to keep the balance in the economy. Pressures to slash down rates have mounted from industries affected by the high level of interest rates.

RBA's Glenn Stevens said that measures of underlying inflation have been increasing this year, after declining for the previous two years.

"While they have, to date, remained consistent with the 2-3 per cent target on a year-ended basis, the Board remains concerned about the medium-term outlook for inflation. A key question will be the extent to which softer global and domestic growth will work, in due course, to contain inflation," Governor Stevens said in an issued statement.

According to BellFX general manager Mr Nicholas White, interest rates have now been on hold for almost a year, with the Reserve Bank of Australia balancing inflation concerns against an increasingly fragile world environment and signs of slowing in some industries locally.

"A high Australian dollar has also have taken pressure off the central bank to tighten interest rates beyond its current 'mildly restrictive' stance," Mr White said in an email to clients after the RBA announcement.

He noted that while a mining boom is on play, "the high Australian dollar and relatively high level of interest rates are taking a toll on industries such as tourism, retail and manufacturing."

Economic indicators such as the lower current account deficit had been considered by the RBA to consider making an upward or downward adjustment.

Current Account Deficit Down

The current account figures published earlier on Tuesday showed the deficit fell from $11.1 billion to $7.4bn.

Moody's Analytics associate economist Katrina Ell said in a related report of "the Australian" that mining and recovering exports would have helped steer the economic turnaround in the second quarter.

"Mining and agriculture output and exports have been on the mend since January's floods, and drove the strong second-quarter recovery," Ms Ell said.

"A surge in business investment to support the mining boom also provided a boost to second-quarter growth.

"The strong capital investment plans suggest mining will continue to drive the robust economic growth ahead."