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Despite describing current interest rate as being "very accommodative," the Reserve Bank of Australia said that it is prepared to cut rates if inflation remains sluggish over the following years.

"Continued low inflation would provide scope to ease monetary policy further, should that be appropriate to lend support to demand," the minutes of its April board meeting said.

Earlier in April, RBA held the cash rate at two per cent—its rate since May 2015. The bank said that the interest rates are just at the right level amid a slowing labour market, a rising Australian dollar, and a low global inflation. The bank also downplayed the fluctuations in the labour market since it was noticeably stronger than last year.

According to JP Morgan economist Ben Jarman, the minutes of RBA's meeting showed that the bank is not only focusing on domestic factors when determining interest rates.

"Stable rates, in this context, imply more accommodative policy, which is needed to offset global disinflationary forces," he said.

Felicity Emmett, head of Australian economics in ANZ, doubted that there would be a near-term rate cut based on RBA's upbeat economic outlook.

"The strength in the very recent data would leave the Reserve Bank comfortable that the non-mining recovery had continued to gain traction over the past few months," she said.

CommSec economist Savanth Sebastian also does not see a rate cut in the near future.

"It would need to feel confident that a rate cut would have the desired impact in driving the Aussie dollar lower," he said.

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