THE central bank has left interest rates unchanged, but business groups aren't too disappointed because the economy should get a boost once the federal election is over.
As expected, the Reserve Bank of Australia (RBA) left the cash rate steady at the all time low of 2.5 per cent after its monthly board meeting on Tuesday.
"The board judged that the setting of monetary policy remained appropriate," RBA governor Glenn Stevens said in a statement.
The central bank will continue to keep an eye on the economy in coming months so that inflation remains under control.
Housing Industry Association chief economist Harley Dale believes the central bank could lower the cash rate later this year, to support a modest recovery in residential construction.
"A final round of interest rate cuts in late 2013 would coincide with a likely boost to household and business confidence following the federal election," he said in a statement.
"That combination would help set the platform for a sustained recovery in new home construction and a turnaround in renovations investment."
For most of this year, the impending election has been the "elephant in the room" keeping a lid on economic activity, according to mortgage provider network 1300HomeLoan managing director John Kolenda.
"There will be widespread relief this weekend that it will finally be done and dusted with hopefully a clear result one way or the other," he said.
Mr Kolenda also expects another RBA rate cut before the end of the year.
Loan Market director Mark De Martino said the proximity of Saturday's election would have been in the mind of the RBA board because of the potential for a change in government.
"The spending or savings initiatives promised by a new government will be important for the RBA to consider," he said.
Master Builders Australia chief economist Peter Jones said whichever party wins power, they can't just rely on low interest rates to support the economy.
"The new government must immediately take action to get economic policy settings right and commence the process of kick-starting increased growth, productivity and employment," he said.
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