The RBA made the decision to keep the cash rate at 4.75 percent after a slowing economy saw an underlying inflation rate of just 2.4 percent, well within the target band.

The decision came after the economy recorded its steepest three-month drop since 1991, brought on in large part by the Queensland floods.

The RBA’s announcement comes as no surprise to economists, with both consumers and business are keeping a tighter hold on their pursestrings.