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.

Commonwealth Bank, Westpac, ANZ, and National Australia Bank—announced 25 basis point interest rate cuts on Tuesday, following the Reserve Bank of Australia’s (RBA) decision to lower its benchmark rate for the first time in over four years.

The Reserve Bank of Australia on Tuesday cut benchmark interest rates for the first time in over four years, joining ranks with other major global central banks, as softening inflation allows room for easing policy.