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.

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.

The Reserve Bank Board of Australia (RBA) announced they had cut interest rates by 25 basis points to 4.10%.  The easing is the first since November 2020, when the central bank cut rates while grappling with the pandemic’s economic slowdown.