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Policymakers of Reserve Bank of Australia suggested that it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead.

According to the minutes of the monetary policy meeting held on June 4, members said developments in the labor market would be particularly important, in assessing whether more easing was appropriate.

However, members observed that lowering the interest rate was not the only policy option available to help reducing the jobless rate.

The bank had lowered the cash rate by a quarter point to a record low 1.25 percent at the June meeting. This was the first reduction since August 2016.

Interest rates will be cut again at the August meeting, though given that the unemployment rate remained high at 5.2 percent in April and annual GDP growth eased further to 1.8 percent in the first quarter, the RBA may decide to cut again as soon as July, Ben Udy, an economist at Capital Economics, said.

At the June meeting, members assessed a low likelihood of a rate cut resulting in an unexpectedly strong pick-up in inflation, given the extent of spare capacity.

Members also observed that a lower level of interest rates would stimulate activity and thereby improve the resilience of the Australian economy to any future adverse shocks.

Australia's flexible inflation targeting framework did not require inflation to be within the target range at all times, which permits the board to set monetary policy so as best to achieve the broad objectives of central bank.

Nonetheless, policymakers agreed that the inflation target plays an important role as a strong medium-term anchor for inflation expectations, to help deliver low and stable inflation, which in turn supports sustainable growth in employment and incomes.