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.

The central bank had held its policy rate steady at 4.35% since November 2023, following an extended period of 13 rate hikes to tame inflation at home.