The Reserve Bank of Australia (RBA) defied expectations this week by holding its benchmark cash rate at 2.25%. A majority of traders and economists had believed the central bank would lower rates once again, following its quarter-point cut in February.

Although economists had expected the RBA to lower rates at some point this year, it was the cavalcade of easing measures initiated by its central bank peers that finally forced its hand in early February. Prior to that, the bank had been concerned that another rate cut would simply fuel a further expansion of the country’s housing bubble.

But even though the previous level of the bank’s cash rate was already at an all-time low, it was still significantly higher than the benchmark short-term rates among its central bank peers. The RBA has historically kept short-term rates relatively high to attract capital inflows in order to help offset the country’s tendency to run persistent trade deficits.

In fact, higher rates were a key factor in the Australian dollar’s strength until a more hawkish U.S. Federal Reserve caused the U.S. dollar to surge.

While the declining exchange rate has been agonizing for U.S. investors in Australian stocks, the RBA sees a lower aussie as absolutely necessary to bolster the country’s economy now that commodities have crashed.

With so many central banks shifting into easing mode, the RBA knew that it had to keep pace or else it would risk a jump in the exchange rate.

To get a sense of how attractive aussie-denominated debt is to global institutions, Bloomberg noted that when Australia’s 10-year note recently hit an all-time low, it still offered a 1.5 percentage point premium to the debt of the country’s triple-A rated peers.

The aussie currently trades just above USD.77, its lowest level since the Global Financial Crisis. And the RBA would like to see the exchange rate go even lower, to around USD0.75.

Indeed, central bank chief Glenn Stevens observed that while the aussie has fallen sharply against the U.S. dollar, it hasn’t declined by nearly as much when measured against a basket of currencies. As such, he said the Australian dollar remains above most estimates of its fundamental value.

Like its central bank peer in Canada, the RBA decided to leave interest rates unchanged from last month in order to give its recent rate cut time to work. It also gives the bank time to work together with other regulators to rein in speculation by real estate investors.

Nevertheless, traders are pricing in two more quarter-point cuts over the coming year, with a thin majority betting on another rate cut as soon as the RBA’s May meeting. In the statement accompanying the announcement of its rate decision, the RBA said further easing may be appropriate in the period ahead, so the bank has definitely shifted to a downward rate bias from its former neutral stance.

To be sure, the RBA is admittedly uncomfortable with the hand it’s been dealt. As RBA Deputy Governor Philip Lowe recently remarked, “Global developments have left us with a higher exchange rate and lower interest rates than would otherwise have been the case.”

And the bank has once again said there are limits to what its monetary policy can achieve. But the limits of monetary policy are hardly an Australian problem.

After all, even though it’s been six years since the Global Financial Crisis, interest rates across the developed world remain well below historical norms. And at least 20 central banks have initiated new easing measures since the beginning of the year.

Much of the world’s growth is dependent upon demand from the U.S. and China. But China’s economy is in slowdown mode, while policymakers are still wary of seeing whether the U.S. economy can stand on its own again in a rising-rate environment.