The Reserve Bank has held interest rates steady at its November meeting, denying shoppers a boost in buying power ahead of the Christmas shopping season.

Despite concerns about a sluggish national economy and a rising unemployment rate, the central bank kept the official cash rate at 2 per cent for the sixth consecutive month.

• Read the full statement from the RBA

A month ago when the central bank last met it looked like the official cash rate would be on hold at an all-time low of two per cent indefinitely. The central bank last cut rates in May 2015.

But since then the four big banks have unexpectedly raised their mortgage rates to cover the cost of new prudential rules, while inflation figures have proved extremely benign and there are further signs that the housing market has lost its froth, triggering speculation that the RBA might move to offset the hit to borrowers.

Market watchers said Tuesday’s decision was finely balanced.

The Australian dollar fell as much as a third of a US cent, suggesting investors expected the next rates moves to be down.

Shortly after the decision was announced, the local currency was worth 71.47 US cents, down from 71.71 US cents shortly before the RBA’s decision was announced. At 5:00pm (AEDT) it was buying 72 US cents.

Treasurer Scott Morrison said the Government wanted to encourage jobs and growth and that interest rates were already low.

“Rates are stable and they’re low, which I think provides a good opportunity for businesses, particularly, to invest,” he told Macquarie Radio.

“We’ve seen those conditions for businesses in various surveys continuing to improve and that’s encouraging.”

What the RBA said

RBA governor Glenn Stevens says while the prospects for an improvement in economic conditions had firmed, a rate cut could be on the cards down the track.

“The outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand,” he said in a statement after the RBA’s monthly board meeting on Tuesday.

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September quarter figures out last week show that inflation for the year to September was 1.5 per cent, well below the RBA’s two to three per cent target band.

“At today’s meeting the Board judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate at this meeting,” the RBA said in its statement.

“Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand.”