The board's decision was universally expected.

Despite this, the Australian dollar spiked about one-fifth of a US cent on the news before easing again.

In late local trade, it was buying US71.05¢ compared with an intraday high of around US71.50¢.

The RBA last cut the cash rate in May, by a quarter of a percentage point, after a similar reduction in February.

Despite sluggish domestic growth and a sharp fall in the terms of trade – the value of exports versus the cost of imports – the RBA is reluctant to cut rates further, preferring the weaker Australian dollar and already low cost of credit to fuel investment, spending and non-mining exports.

The central bank is also concerned about stoking further house price inflation in Sydney and Melbourne, although new regulatory controls on bank lending to buy-to-let and buy-to-sell investors should allow it more flexibility in this area.

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RBA governor Glenn Stevens' statement on Tuesday was little changed from his comments on the August decision to hold rates.

However, recent market volatility in China and fears about the extent of its economic slowdown came in for special attention.

Mr Stevens noted "some further softening in conditions in China and east Asia of late".

"Equity markets have been considerably more volatile of late, associated with developments in China, though other financial markets have been relatively stable," Mr Stevens said.

Most economists expected the RBA to remain on hold at least until the end of the year.

However, a few said the RBA could cut the cash rate for the third time this year in November.

"The RBA would clearly prefer not to have to lower the cash rate again, in our opinion," Nomura's rate strategist for Australia, Andrew Ticehurst, said.

"However, we continue to see a cut as more likely than not, though we acknowledge the risk that it may not come as soon as our base case call for a cut in November," he said.

However, National Australia Bank said Mr Stevens' repeated emphasis on "sustainable" growth and inflation in the final paragraph of the statement suggested "the hurdle to further policy easing remains higher".

"The RBA appears to be in no hurry to cut again anytime soon," NAB's senior economist for markets, David de Garis, said.

All eyes now turn to Wednesday's national accounts, which are expected to show gross domestic product growth of 0.4 per cent in the June quarter and 2.2 per cent year-on-year. This compares with 0.9 per cent and 2.3 per cent, respectively, in the March quarter.

However, some economists have warned of a flatter result or even contraction in the quarter.