The Reserve Bank is in no rush to move on interest rates as it waits to see how the Australian economy copes with its present challenges.
In the minutes of its July board meeting, when it left the cash rate at a record low 2.5 per cent, the RBA said low interest rates were helping to stimulate the economy.
However, the central bank expressed concern about whether the low rates would be enough to offset the impact of the government's planned budget cuts and the mining investment slowdown.
"The board judged that it was prudent to leave the cash rate unchanged," the RBA said in the minutes, released on Tuesday.
"Low interest rates were working to support demand, but members agreed that it was difficult to judge the extent to which this would offset the anticipated substantial decline in mining investment and the effect of planned fiscal consolidation."
JP Morgan economist Ben Jarman said the comment reflected the "heightened uncertainty" the board was facing.
He said slight tweaks to the RBA's language in the minutes suggested it was leaning toward cutting rates.
"By introducing a little more conditionality on the `period of stability' guidance, the door opens a little to an easing bias later on if the data deteriorate further," he said.
But St George senior economist Janu Chan said the minutes suggested the scales had tipped closer towards balance, following a more cautious tone in recent months.
"There was a slight upgrade in the outlook for (economic) growth - the RBA now expects growth to be `a little below trend over the next year', whereas this was previously `below trend'," Ms Chan said.
CommSec chief economist Craig James said the minutes contained slightly different wording but the same sentiment: "move along, move along, nothing to see here".
"The Reserve Bank board is in no rush to change rate settings," Mr James said.
He said the next move in interest rates was still likely to be up rather than down, but doesn't expect that to occur until next year.
Citi economists Paul Brennan and Josh Williamson said time was on the RBA's side.
"The RBA is in no rush to judge how the opposing forces of monetary stimulus versus declining mining capex and fiscal consolidation will play out," they said.
"Reflecting these opposing forces, the minutes point to the mixed performance of the economy with housing construction and resource exports both performing strongly, non-mining investment picking up gradually, consumer spending easing and indicators of the labour market mixed."
