The members of the Reserve Bank of Australia's monetary policy board still believe that additional monetary easing facilities remain a possibility, minutes from the bank's December meeting revealed on Tuesday.
The bank also expects below-trend economic growth in 2014, the minutes showed - with an increase in business investment likely offset by a decline in mining investment.
"The board had judged that leaving the cash rate unchanged was appropriate while continuing to gauge the effects of the substantial degree of monetary policy stimulus that had already been put in place," the minutes said.
At the meeting, the RBA decided to keep its benchmark cash rate unchanged at a record low of 2.50 percent for a fourth consecutive month.
The policymakers also remain concerned that the Australian dollar still remained uncomfortably high, and that a lower level of the exchange rate is needed to achieve balanced growth in the economy.
Maintaining their tentative easing bias, policymakers at the Reserve Bank Board noted that the board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.
"The board's judgment remained that, given the substantial degree of policy stimulus that had been imparted, it was prudent to hold the cash rate steady while continuing to gauge the effects of earlier reductions, but not to close off the possibility of reducing it further should that be appropriate to support sustainable growth in economic activity," the minutes said.
The RBA has reduced the cash rate by a cumulative 225 basis points since November 2011 on the premise that accommodative policy is needed to support demand in areas outside the resources sector, as the peak in mining investment approaches.
At the meeting, the Board judged the current setting of the monetary policy as "appropriate" as the easing in monetary policy since late 2011 has supported interest-sensitive spending and asset values.
The board expects private demand outside the mining sector to increase at a faster pace, though it sees considerable uncertainty surrounding this outlook.
There has been an improvement in indicators of household and business sentiment recently, but the central bank said it is still unclear how persistent this will be. The bank also expects public spending to be quite weak going forward.
However, inflation remained consistent with the medium-term target and that this is likely to be the case over the next one to two years.
"While the exchange rate had depreciated over the month, members agreed that it remained uncomfortably high and a lower level would likely be needed to achieve balanced growth in the economy," the minutes said.
Also on Tuesday, the Australian Bureau of Statistics said that the total number of new motor vehicle sales in Australia was up a seasonally adjusted 1.8 percent in November compared to the previous month, standing at 94,978.
That was shy of forecasts for 2.5 percent following the 0.7 percent decline in October.
By classification, sales of sports utility vehicles spiked 5.1 percent, while other vehicles climbed 2.0 percent and passenger vehicles eased 0.1 percent.
By region, six of the eight states and territories experienced a monthly increase.
The Australian Capital Territory saw the largest percentage increase (5.3 percent), followed by Victoria (4.2 percent) and South Australia (3.0 percent). Over the same period, sales in Western Australia shed 4.3 percent.
On a yearly basis, sales were down 0.5 percent after shedding 3.1 percent in the previous month.
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