The Reserve Bank of Australia (RBA) held rates steady at 4.75 percent again this month due to the eurozone debt crisis and worries over US growth.

But the possibility of "somewhat slower" growth and higher unemployment than previously forecast, meant "the inflation outlook appeared less concerning than was the case a few months ago," the bank said.

"Members believed that an improved inflation outlook, if confirmed by further data, would increase the scope for monetary policy to provide some support to demand, should that prove necessary," the bank said in the minutes of its October 4 meeting released Tuesday.

Official inflation data is due out Wednesday.

The Australian dollar was little changed by the news, with analysts saying the bank's intentions remained unclear.

"The minutes were pretty dovish, but we know (the bank) changed their position back in October," said National Australia Bank's head of research Peter Jolly, referring to a possible rate cut.

"And while they have set themselves up to cut rates if necessary, much is still unclear about what makes a rate cut necessary."

The RBA has held interest rates firm since November 2010 as it juggles uneven domestic growth between the mining and non-mining sectors and a historically strong Aussie dollar.

The bank said global financial markets continued to be "very unsettled", weighing on consumer and business confidence in the major economies and likely to affect spending and growth.

Commodity prices had subsequently eased, bringing the Australian dollar down from its recent record above US$1.10.

"The pace of near-term growth was unlikely to be as strong as earlier expected, reflecting both local and global factors, including the financial turmoil and associated effects on business confidence," the RBA said.

"These developments, together with new data showing that the pick-up in underlying inflation had been more gradual than initially indicated, suggested that the medium-term inflation outlook may now be more consistent with (the bank's) 2.0-3.0 percent target."

Mining exports to Asia helped Australia dodge a recession during the last global downturn, but record flooding and cyclones saw its economy contract in the first three months of 2011.

Though it rebounded strongly to record 1.2 percent growth in the June quarter and unemployment is at a relatively low 5.2 percent, economists have warned of underlying weakness and further deterioration in the coming months.