RBA leaves interest rate at 2% in August

THE Reserve Bank has left the official cash rate on hold for the third consecutive month. 

The board last cut interest rates in May, when it reduced rates by 25 basis points to the record low of 2%.

In a statement made after the board's meeting today, RBA's Governor Glenn Stevens said Australia's terms of trade are falling, with key commodity prices much lower than last year.

Mr Stevens also noted the reserve is expected to start increasing its policy rate later this year.