Sydney, Jul 3 (IANS): The Reserve Bank of Australia (RBA) Tuesday announced its decision to leave the cash rate unchanged at 3.50 percent after its July board meeting.

The decision to hold comes after the central bank cut the cash rate by 50 basis points in May and 25 basis points in June, reported Xinhua.

RBA Governor Glenn Stevens said Tuesday that the Australian economy grew faster than expected in first part of 2012, but there were signs of weakening in Europe and slower growth in China.

He said there had been no changes to the RBA's outlook for inflation.

Stevens said financial markets had initially responded positively to signs of further progress towards longer-term sustainability in European financial affairs. However, he said Europe would still be a potential source of adverse shocks for a while.

"At today's meeting, the board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate," Stevens said in a statement accompanying the decision Tuesday.