A continuing improvement in the global and domestic economies has reduced the chance for more rate cuts by the RBA, economists say.
The minutes of the central bank's board meeting on August 4, release on Tuesday, noted members expected it was unlikely to lower the cash rate further as the growth forecasts for the economy had continue to improve.
The central bank left the overnight cash rate at a 49-year low of three per cent for the fourth consecutive month.
''In recent months, members had left open the possibility of further reductions in the cash rate should further downside risks to the economy emerge,'' the minutes said.
''Given the recent improvement in the global and domestic outlooks, it now appeared unlikely that this would be necessary.
''In fact, if the economy evolved as anticipated in the forecasts, the Bank would in due course need to adopt a less expansionary policy stance.''
Citigroup senior economist Joshua Williamson said the RBA was laying the groundwork ahead of its first lift to the cash rate.
''The Reserve Bank certainly wants to remove the excess accommodation that is in place at the moment,'' Mr Williamson said.
''They want a few months to assess how the consumer is going to cope post the cessation of the handouts and see how the labour market works out as well.
''They are preparing the market and households for the inevitable increase in interest rates.''
Debt futures markets are pricing in a 25 basis point hike in the cash by November.
Mr Williamson said the central bank would wait for confirmation the local economy was holding up once the impact of the federal government's cash handouts faded.
''They just want a few more months to assess the domestic economic data on the consumer side and get further confirmation that we are not seeing a slump in household expenditure growth,'' Mr Williamson said.
''If we see relatively more benign labour market indicators, it is game on.
''December is still a very good bet for an interest rate increase.''
St George chief economist Besa Deda said the general tone of the minutes from the latest board meeting echoed the quarterly statement on monetary policy and RBA governor Glenn Stevens' testimony before a parliamentary hearing on Friday, August 14.
Ms Deda said it differed from recent bank comments with the mention of the risk of lifting the cash rate too soon.
''On the other hand, there was a risk of an early tightening choking off confidence and demand prematurely,'' the minutes said, of lifting the cash rate too early.
The RBA board was possibly trying to dampen the enthusiasm of financial markets, which have priced in the first rate hike of 25 basis points by November, Ms Deda said.
Ms Deda expects the central bank to lift the cash rate in the first quarter of 2010, but she would not rule out it moving before the end of this year.
''That might add to the case that markets are pricing in a rate hike too soon and you might see a bit of paring back of how soon a rate hike may occur,'' Ms Deda said.
''It is pretty close to certain that they will not be cutting rates again and the next move is up.
''The question remains one of timing, which we still think it will be early next year.''
National Australia Bank (NAB) head of research Peter Jolly said the minutes all but confirmed the next move for interest rates was up.
''If you needed any more confirmation, and I can't believe anyone does, this makes it more clear that their policy deliberations are when to remove the ease and start lifting interest rates,'' he said.
But he said a hike in rates before November was unlikely.
The debt futures market has priced in a 150 basis point's worth of rate rises between November and July 2010.
''Every time the central bank has spoken lately the market has interpreted them hawkishly,'' he said.
''You expect you'd need a few months of data to come to a conclusion.
''But you would not rule out November, December hikes.''
The release of the minutes on Tuesday was the latest in a series of communications from the central bank during August.
On August 7, the bank released it's statement on monetary policy, which outlined a positive outlook for the national economy.
Meanwhile, RBA Governor Glenn Stevens told a parliamentary committee on August 14 that the cash rate would need to return towards more ''normal'' levels from its current 49-year low of three per cent, after recent indicators highlighted the resilience of the domestic economy.
AAP
