Investing.com - The Australian dollar weakened on Tuesday after the central bank, as expected, held its cash rate at a record low 2.5% and indicated a continued stable outlook and the need for a weaker currency to help rebalance the economy. AUD/USD traded at 0.8923, down 0.15% after the announcement, which followed data that showed the fourth quarter current account balance narrowed to A$10.1 billion, in line with expectations of a deficit of A$10 billion from A$12.7 billion in the third quarter. "Looking ahead, the Bank expects unemployment to rise further before it peaks. Over time, growth is expected to strengthen, helped by continued low interest rates and the lower exchange rate. Inflation is expected to be consistent with the 2–3 percent target over the next two years," Governor Glenn Stevens said in a statement following a board meeting to review interest rates. "In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates."

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