Australia's central bank is cautious about cutting rates further given cost pressures in a hot labour market, but it will respond if inflation slows more quickly than expected, senior officials said on Friday.

The Reserve Bank of Australia isn’t committed to any course of action on interest rates with Gov. Michele Bullock cautioning that easing policy too quickly may stoke a fresh wave of inflationary pressures.

Australia’s central bank has reduced its benchmark interest rate for the first time since October 2020 as the nation’s inflation cools.