The Reserve Bank of Australia (RBA) has left interest rates on hold at 3 per cent for a second month in a row, as widely expected by economists who say there’s still a chance of more rate cuts towards the end of the year.

The key cash rate remains at a 49-year low. The RBA has cut 425 basis points from the official rate between last September and April in a bid to cushion the economy from the affects of the global downturn.

RBA Governor Glenn Stevens said in a statement 'evidence has continued to emerge that the global economy is stabilising, after a sharp contraction during the December and March quarters. The turnaround is clearest in China and some other emerging countries. Recovery in the major countries is likely to take longer to begin and be slower when it does occur.”

The Reserve Bank has since indicated it is in no rush to lower rates further as it assesses the impact of its easing in monetary policy and the Federal Government's stimulus packages. The stimulus packages have buoyed the retail industry, with figures from yesterday showing consumers spending a record $19.4 billion shopping in April.

Recent economic indicators have mostly been surprisingly positive. Earlier today, the Australian Bureau of Statistics (ABS) released figures showing that Australia 's deficit fell to $4.6 billion during the first quarter of the year, from $6.35 billion in the final three months of 2008. Also the deficit on goods and services dropped by nearly $6 billion in the first quarter - which the ABS said could boost the gross domestic product (GDP) by 2.2 per cent.