The Reserve Bank of Australia has kept the cash rate at 4.25 per cent at its March board meeting.

The last time the central bank cut the official interest rate was a quarter per cent cut in December, which followed on from a cut at the November board meeting.

Commonwealth Bank chief economist Michael Blythe said the RBA had become more positive about the global economic outlook.

“What was worrying them back in December, the gyrations in Europe and concerns about the global economy more generally, those concerns have obviously receded a long way.”

He said the positive tone of Tuesday’s statement means further interest rates are unlikely unless the global or domestic economy’s took a turn for the worse.

“Something needs to change in a negative way to get another rate cut over the line,” he said.

“The risks that have been there for a while are still there, but we actually need to see them become a bit more prominent.”

However, he said the RBA had plenty of scope to respond if the economy does weaken.

“We’re in the happy position of having trend growth, which meant you don’t have to do much but in target inflation which means you can respond if necessary.”

RBC senior economist Su-Lin Ong said the Reserve Bank would need a shift in domestic data – particularly relating to jobs – in order to shift rates down.

“The onus still is clearly for activity data to weaken materially,” she said.

“By that we would expect a sustained rise in the unemployment rate to push them into easing. They look pretty comfortable with rates where they are.”

Ms Ong said the central bank had not changed its language in describing either the global or domestic economy.

“Most of the text is unchanged from the last time, particularly in their discussion of the Australian economy and the globe as well,” she said.

“They continue to note that financial pressures have declined a bit, but there are still some challenges to growth globally.

“Overall, it’s a fairly balanced statement.”