The RBA has indicated that a 'clouded' international outlook had contributed strongly to a decision to keep the cash rate on hold.

In the minutes of its Monetary Policy Meeting held on 6 September, when the Reserve Bank board kept rates steady at 4.75%, the RBA said that conditions in global financial markets had been "very unsettled", largely due to uncertainty about the sovereign debt problems in Europe ant the United States.

However, the RBA said there was little evidence available to help in gauging the effects on other regions, including the local economy in Australia. "Very little hard data were available, as yet, on which to base judgements," the minutes read.

The RBA minutes state that the near-term growth outlook looks "somewhat weaker" than previously expected, but that the medium-term outlook still appeared positive, depending on how far the global economic outlook deteriorated.

The RBA said concerns about domestic inflation had risen, but that it remained within the 2-3% target band on a year-end basis.

"A key question for members was the extent to which recent global and domestic developments would reduce capacity pressures in the economy and, in due course, help to contain inflation," the minutes read.

"As further information became available on the domestic and international economies, members would continue to assess the medium-term outlook for inflation and growth. For the present, however, members considered that the current setting of monetary policy left the Board well placed to respond to evolving global and domestic economic conditions.