By Greg Peel

"Financial market sentiment has continued to improve in recent weeks," notes RBA governor Glenn Stevens in his statement accompanying today's monetary policy decision, "and capital markets are again supplying funding to corporations and well-rated banks, albeit at costs that are higher, relative to benchmark rates, than in mid 2011." [My emphasis]

Take that Aussie bank bashers! This little observation represents one of the few additions in today's statement compared to February's statement and, perhaps given the governor had to recently suffer interrogation by the government's House Committee, and perhaps also in response to a recent claim by a SocGen economist which was jumped on by the tabloids, Glenn has come out in support of his non-central banking colleagues. Swans and Hockeys should pay attention.

Later in the statement Stevens notes interest rates for borrowers have "generally risen slightly" ? a reference to last month's out-of-cycle bank rate hikes ? but remain "close to their medium-term average".

It would seem that in leaving the RBA cash rate steady once more at 4.25% today, the board has acknowledged that if for some reason a rate hike was on the cards, it has already been applied to some extent by the banking fraternity. But even with a big jump in exports of iron ore and coal in the December quarter, as indicated by today's current account data, a rate hike was never considered.

The climate is still one of whether or not another rate cut is justified. In that regard, there was very little in today's statement that differed from the February statement. The only noticeable difference, in the RBA's assessment of the European, US and Chinese economies, is that while in February the risks were "still skewed to the downside" for Europe, this month "several European countries will record very weak outcomes" and "the global economy will grow at below trend pace" but "this does not suggest that a deep downturn is occurring".

We recall that Greece has been "saved" again since the last meeting.

On the domestic front, an important word did emerge this month that wasn't there in the February statement. It was in the February minutes nevertheless and I pointed it out at the time, and that word is "structural".

In the February statement, Stevens noted "the Australian economy continues to suggest growth close to trend, with differences between sectors".

Today Stevens notes "the Australian economy continues to suggest growth close to trend overall, with differences between sectors and considerable structural change". And having reiterated an expectation that inflation will remain in the 2-3% range for the time being, Stevens adds "This forecast embodies an expectation that productivity growth will improve somewhat as a result of the structural change occurring in the economy".

How does productivity grow? Well one way is to increase GDP per capita by reducing the capita. Mr Stevens may which to pick me up on this, but I'm going to take some licence and have a go at paraphrasing him.

"There is no point I whinging about how the miners are making all the money and preventing interest rates from being cut when you in the retail sector ? the biggest employer in the country ? or you in the manufacturing sector, are doing it hard. Wake up and smell the roses Gerry, this is not a temporary issue, like the floods. This represents 'structural change', and structural change is a one-way street ? just ask the record industry.

"Such a change may prove unfortunate for some but if the likes of retailing and manufacturing are forced to catch up to today's world then this should lead to improved productivity in this country ? something which has been sadly lacking".

If I'm anywhere near correct in my presumption, Stevens is emphasising that the "two-speed" or "multi-speed" economy will make no difference to monetary policy considerations. In the meantime, Stevens has reiterated that the inflation outlook does provide scope for another rate cut "should demand conditions weaken materially". Judging by today's current account data, it would be difficult to see a rate cut in April.

Read the full statement here.