The 25 basis points cut handed down by the Reserve Bank of Australia (RBA) this month was meant to push for stimulus "that would be expected to flow through to the domestic economy over the coming months."

In the minutes of the June 5 RBA board meet, the central bank took the view that while the local economy was moving ahead with its fundamentals in the correct position, the current global situation dictates that policy managers must encourage for the establishment of sufficient firewalls in the event the crisis in Europe gets deeper and wider.

Economists have warned that the credit crunch in Europe will only get worse before it improves and distant economies like Australia will likely catch the spillover effect.

Grave concerns have been raised on the "probability of a sharp deterioration in economic conditions," in the eurozone, said the RBA minutes that were made public on Tuesday.

"There was clear evidence of a softening in global economic conditions, and uncertainty about the future in Europe had increased significantly," the RBA board said, which it added mainly prompted its move to follow through with the huge 50 basis points reduction that was imposed in May.

"There was a reasonable likelihood that the tendency toward precautionary behaviour, both abroad and at home, would intensify," the RBA minutes was reported by the Australian Associated Press (AAP) as saying.

But the board clarified too that at the moment, any spillover effects, if any, have been largely contained.

The positive results of RBA's easing interventions this year will not be readily felt, the board said, which has amounted to the country's borrowing cost being shaved off a total of 75 basis points on top of the 50 basis points that the central bank had rolled out in November and December 2011.

The same amount of cash rates trimmings, 125 basis points so far, in the past eight months is expected by economists to be replicated over the next 12 months, Reuters said, likely pushing down the current rate of 3.5 per cent to 2.25 per cent prior to the expected political transition in 2013.

Analysts noted that the June RBA minutes were silent on when the next cut would take place anew but they were agreement, as Reuters wrote, that at least one more will be provided before the current year marches to its end.

But the factors that could shape up the RBA's future decisions were well defined: foremost of which is the two-speed economy that has shored up the fortunes of the resource sector but battered industries that were not directly benefitting from the ongoing mining boom.

The RBA noted too that even the mining sector was not problem-free as it cited that "weaker global prospects had led to lower commodity prices, which, combined with a reduction in the global appetite for risk, had led to a depreciation of the Australian dollar."

Also on RBA's radar is the programmed cooling down of China's economy and the marginal recovery being seen in the U.S. economy, which if coupled with further retreat in Europe's conditions could prod the central bank to accelerate its projected interventions in the local settings.