THE Reserve Bank of Australia stands ready to cut interest rates if necessary.
But the minutes of the September 4 meeting of the RBA board give no strong hint that the economy has reached that point.
Three themes emerging most strongly from the minutes of the monetary policy meeting, released on Tuesday, were the persistently high Australian dollar, the falls in commodity prices chipping away at mining investment plans, and a deterioration in the global economic outlook.
But they don't yet make a strong case for lower rates.
The RBA said that while models suggest the exchange rate is overvalued, it was "not substantially so", and those models were subject to "significant uncertainty".
The falls in commodity prices had caused some mining projects to be shelved, but this had only had a "small effect" on the profile of mining investment over the near term.
In any case, thanks to offshore gas projects already under way, there was still likely to be "a substantial increase" in resource investment in the coming year or two. And, while the world outlook had softened, the change had only been "slight".
So the factors making the case for lower rates still look unconvincing.
On the other hand, the only information the RBA had on inflation had been news of a slight rise in wages growth.
And it noted signs that the interest rate cuts of late 20011 and May and June this year were still working their way through the domestic economy.
Both are reasons for the RBA to hold its fire. Maybe the RBA will cut the cash rate again when its board meets next on October 2, but the minutes of the September 4 meeting do not appear to flag a move.