Monday's inflation report showed a decline in prices of fruits and vegetables, which dropped by 5.6 percent last month after a decrease of 1.6 percent in August.

In spite of this development, the Reserve Bank of Australia is expected to remain cautious and the standard interest rate of 4.75 percent could stay as it is, based on a survey of economists conducted by Bloomberg.

RBA Governor Glenn Stevens has not made any changes in interest rates since he raised it in November of last year.

In a public statement Sept. 7, Stevens said it was best to take a breather as consumers tighten their belts and international financial markets remain unstable.

"The RBA may maintain rates for a longer period," Anne Beacher of Asia-Pacific research at TD Securities in Singapore predicted.

Meanwhile, JP Morgan Chase & Co. forecast that Stevens will probably restrain borrowing costs until 2012.

The Reserve Bank considered increasing interest rates last month but held this in abeyance due to the tremendous unpredictability in the world's financial markets brought about by the debt crises in Europe and the U.S., The Australian reported.

Stevens declared in a previous news conference in Perth that "periods of sudden increases in anxiety within international economies are moments when, if at all possible, it is good to be in a position to be able to maintain steady settings," Bloomberg reported.

The central bank intends to contain annual inflation on an average of 2 to 3 percent.

Prices of commodities went up by 0.1 percent in September following a falling off in August.

Paul Bloxham, chief economist of HSBC, said there was not enough proof that the Australian economy had deteriorated to merit a reduction in rates by the RBA.

"The negative aspect of growth in developed countries would be hovering over their minds but this has to be balanced against the positive aspect to inflation from the heavy demand for Australia's products, the boom in mining and weak supply aspect of the country's economy," he stated.