The Reserve Bank of Australia is biding its time as it waits to see how a range of risk factors play out in the months ahead.

Its outlook for economic growth and inflation, detailed in the Statement on Monetary Policy on Friday, is little changed from the previously quarterly statement in May.

Economic growth is forecast to be close to “trend” – about what can be sustained over the long haul – and inflation predicted to stay in the two to three per cent target range over the forecast horizon, which now extends out to the end of 2014.

Those forecasts are based on the assumption that the cash rate stays at 3.5 per cent, where it has stood since June after a series of cuts beginning in November brought it down from 4.75 per cent.

And if they turn out to be correct, then there will be no great need to move the cash rate from that assumed level.

But the key element of the outlook is, even more then usual, the risks surrounding it.

The main risk is the potential for chaos in the euro area.

But there are plenty of others – China might grow faster or slower than expected, for example, or the US might stumble into fiscal contraction of its own making.

There’s also the risk that the high exchange rate might have a bigger negative impact on the local economy than historical experience suggests, or that the peak in the mining investment boom might be higher or lower, or sooner or later, than supposed.

Or the terms of trade – the ratio of export prices to import prices – could fall more than the RBA is expecting and erode the economy’s growth prospects as it does.

The wide range of risks is such a pervasive aspect of the RBA’s outlook that any monetary policy change, including the cut in the cash rate still factored into market expectations for the coming few month, stands a very good chance of proving to be the wrong one.

As such, it’s understandable that the message from the RBA is that it is waiting to see how things turn out before making up its mind.

The introduction to the statement concluded with the standard message: “The Board will continue to monitor information on the economic and financial conditions and adjust the cash rate as necessary to foster sustainable growth and low inflation.”

The ways things stand, barring a euro meltdown of course, it will do a fair bit more monitoring before it gets around to doing any adjusting.