Soft inflation behind cut
The Reserve Bank says a softer than expected inflation outlook allowed it to cut the cash rate to a record low, as it tries to boost underperforming sectors of the economy.
But the minutes from the central bank's board meeting earlier this month provide no clues as to whether further rate cuts are on the cards.
The RBA said the Australian economy was set to grow at a below-average pace in 2013, while the jobs market was expected to remain soft as investment in the mining sector peaked.
Meanwhile, figures released by the Australian Bureau of Statistics in April showed consumer price index inflation in the 12 months to March was 2.5 per cent - below expectations.
The RBA said inflation was expected to remain within its target range of 2 to 3 per cent for the next few years.
"The board decided that some of that scope to ease policy should be used at this meeting," the RBA said in the minutes, which were released on Tuesday.
"It judged that a further reduction in the cash rate was appropriate to encourage sustainable growth in the economy, consistent with achieving the inflation target."
The RBA cut the cash rate a quarter of a percentage point to 2.75 per cent at its May meeting.