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Members of Australia’s central bank conveyed leaving interest rates on hold this month, but discussions ended that a cut would aid return inflation to aim over time.

As the policy easing approaches in the near term, investors remained quick to temper forecasts, which led the Australian dollar to rally over half a U.S. cent to a session high settled at $0.73.   

"On balance, members were persuaded that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting," minutes of the May 3 policy review shown.

During the meeting, the cash rate was cut by the Reserve Bank of Australia by a quarter point to a record low settled for 1.75 percent.

RBC senior economist Su-Lin Ong stated that the minutes approved the decision to trim interest rates was a "line-ball call."

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"The market will derive from this that another cut near term is unlikely. But were not sure that is the right conclusion," he added.

The minutes exposed that the central bank remained wary about the expected soft inflation in the last quarter.

The minutes said, "Although the March quarter outcome for the CPI reflected some temporary factors, the broad-based softness in prices and labor costs signaled less momentum in domestic inflationary pressures than had previously been expected."

Meanwhile, the RBA noted that no material change has been made toward its outlook for growth, and remained still at the view that the economy continued to rebalance away from the mining sector. It finds support from the "very accommodative" monetary policy, including a lower exchange rate since 2013.  

The minutes revealed about whether the RBA would start cutting rates once more.

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Amid the monetary policy report for the quarter after decisions on the rate, the RBA cut its 2016 underlying inflation estimates to post lower its target band of 2 to 3 percent, encouraging investors to bet once more for another cutting of rates this year.

The interbank futures cut possibilities of a near-term move in interest rates, given markets currently has a 60 percent chance of a cut by August, which declined from 76 percent.

An economist at Capital Economics Paul Dales mentioned that the minutes seemed to support the RBA’s viewpoint, where it mainly intended to trim interest rates once and the timing was just deliberated.  

"We disagree and believe that rates will be cut to 1.5 percent at the August meeting."