* RBA keeps cash rate at record low 1.75 pct
* Says steady policy consistent with sustainable growth
* Aussie dollar climbs half a U.S. cent on neutral tone (Adds details, analyst quote)
By Ian Chua
SYDNEY, June 7 (Reuters) - Australia's central bank held its policy rate steady on Tuesday, refraining from delivering back-to-back easings and appeared to have lifted the bar for another rate cut in a move that saw the local dollar pop higher.
In a widely expected decision, the Reserve Bank of Australia (RBA) kept the cash rate at a record low 1.75 percent after its monthly review. All but one of 52 economists surveyed by Reuters had predicted such an outcome. AU/INT
"The Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time," Governor Glenn Stevens wrote in a brief statement accompanying the decision.
The Australian dollar rose half a U.S. cent to hit a one-month high of $0.7426 AUD=D4 as the neutral tone reinvigorated Aussie bulls.
A cut in June had been highly unlikely after minutes of the May meeting indicated the central bank had considered keeping rates unchanged, suggesting the move was pre-emptive rather than an urgent response to low inflation.
Additionally, recent data showed the economy grew at its fastest pace in over three years last quarter. historically low inflation means the central bank has room to ease again if needed.
"What is a little bit surprising is the RBA has decided not to give a firm indication in terms of bias going forward. We had thought they would reveal some sort of easing bias today. They haven't done that," said Tom Kennedy, economist at JPMorgan (NYSE:JPM).
""At this stage, we are still looking for a lower cash rate."
Investors trimmed the risk of a July cut with interbank futures 0#YIB: implying a mere 14 percent chance, down from 25 percent earlier. The market is still fully priced for a cut by year end. (Editing by Shri Navaratnam)