The Reserve Bank of Australia is ready to increase its policy interest rate if the nation's economic strength continues to point to higher inflation, the central bank said in minutes of its September board meeting released in Sydney today.

Citing concern about the outlook for the U.S. economy and government debt among some European countries, the RBA left the cash rate on hold on September 7.

While the central bank remains "alert" to risks such as weaker global growth, "members considered that if the central scenario came to pass it was likely that higher interest rates would be required, at some point," the minutes said.

Its move to keep the cash rate on hold for the fourth consecutive month was partly based on perceived risks for a subdued global economic outlook, including a renewed downturn in the US, according to RBA.

The central bank has held the cash rate at 4.5 per cent since it took it there from 4.25 per cent in May. Since October, the RBA lifted the cash rate from 3 per cent in six quarter of a per cent increments.

Speculation the bank may resume rate increases this year intensified after reports this month revealed business confidence soared in August to the highest level in four months and employers added 30,900 workers, pushing the jobless rate down to 5.1 percent, the lowest level since January 2009.

Investors have increased bets this month that RBA Governor Glenn Stevens will resume the most aggressive round of interest rate increases as early as next month.

The bank's next monetary policy meeting will be on October 5.