Minutes from the Reserve Bank of Australia's December meeting reveal that the board decided it was too soon to determine whether inflation would be more persistent than previously assumed.
Uncertainties around the reliability of new data series contributed to the cautious stance.
The minutes noted that if financial conditions remain slightly restrictive and any recent rise in inflation proves temporary, maintaining the cash rate at its current level may be sufficient to keep the economy balanced.
The board also highlighted the need to monitor the impact of the recent increase in market interest rates across both short- and long-term maturities.
While recent data suggested upside risks to inflation, members agreed that more time was needed to assess whether these pressures would endure.
Accordingly, the RBA left the cash rate unchanged at 3.6%, while pledging to continue closely monitoring economic data and adjusting policy as necessary to achieve its goals of price stability and full employment.