The Reserve Bank of Australia said policymakers will continue monitoring the labor market closely and expressed willingness to adjust policy further if required.
According to the minutes of the meeting held on July 2, the board observed that the lower interest rates would provide more Australians with jobs and helps in achieving the inflation target.
The minutes said, "The Board would continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time."
At the meeting, the central bank had reduced its key interest rate by 25 basis points to 1.00 percent. This was the first back-to-back rate cut since mid-2012. The bank had reduced its rate by 25 basis points in June.
Wages growth remained low overall despite a moderate pick up in the private sector wages. The spare capacity was likely to remain in the labor market for some time, the minutes noted.
The reductions would assist in reducing spare capacity in the economy and making faster progress in reducing the unemployment rate, the minutes added.
Moreover, members viewed that a decline in interest rates was unlikely to encourage an unwelcome material pick-up in borrowing by households that would add to medium-term risks in the economy.
The minutes confirm that the Board is prepared to move and probably expects to move again but prefers to wait a while to assess the impact of the first two cuts, Bill Evans, an economist at Westpac said. He expects the November meeting will provide timing for further action.
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