Reserve Bank leaves interest rates unchanged at two percent amid concerns on rising Aussie dollar

The Reserve Bank of Australia left interest rates unchanged at a record low of two percent today, but has raised concerns about Australia's high-flying currency.

RBA governor Glenn Stevens warned that the rising Australian dollar could threaten the non-mining economy's recovery.

"Under present circumstances, an appreciating exchange rate could complicate the adjustment under way in the economy," he said in a statement after the RBA's monthly board meeting today.

Tap the play button above for analysis from 9NEWS Finance Editor Ross Greenwood. 

The Australian dollar has spiked seven percent since the March board meeting, which Mr Stevens attributed to rising commodity prices and "monetary developments elsewhere in the world".

Mr Stevens was positive about prospects for the domestic economy but warned tepid inflation provides scope for a future cut.

"New information should allow the board to assess the outlook for inflation and whether the improvement in labour market conditions evident last year is continuing," Mr Stevens added.

The official interest rate has been sitting at two per cent since last May.

Economists say they expect cuts to be made in the coming months. 

"We think that the higher currency recently is a key reason why the Reserve Bank may eventually have to cut interest rates," Paul Bloxham of HSBC told 9NEWS.

"No-one is expecting interest rates to rise anytime soon."