The Reserve Bank of Australia retained the 4.75 percent interest on Tuesday. The bank's Monetary Board cited the volatility which hounds the world financial markets as the reason why it kept the rates which had been unchanged since November 2010.

The bank's decision did not surprise economists since they have forecast that RBA will hold on to the cash rate.

"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," RBA Governor Glenn Stevens said in a statement.

"A key question will be the extent to which softer global and domestic growth will work, in due course, to contain inflation," Mr Stevens added.

He said that the board will continue to make a careful assessment of the evolving outlook for growth and inflation in its future meeting.

A study by BankWest found that small businesses are divided on the effect of the RBA decision on interest rates. The national survey, which had 800 small to medium-sized enterprises as respondents, said 46 per cent viewed the present interest rate as a cause of challenge for the businesses, the Herald Sun reported.

Similar divided results were reported in all Australian states, except in Western Australia where only 34 per cent said interest rates threaten their enterprises.