Policymakers of the Reserve Bank of Australia discussed raising the interest rate by a further quarter point at the September meeting, the minutes of the meeting showed Tuesday.
At the final policy-setting meeting of Philip Lowe as governor, board members considered both lifting the rate by 25 basis points and holding the cash rate target at 4.10 percent.
The case to raise the interest rate was based on the assumption that inflation will remain above the target for a prolonged period and the risk that this period might be extended.
Consumption could be weaker than expected and the downside risks to the Chinese economy had increased, they noted.
"On balance, though, members concluded that recent developments had not materially altered the outlook or their assessment that the economy still appears to be on the narrow path by which inflation comes back to target and employment continues to grow," the minutes said.
The bank had finally opted to keep the rate unchanged in September as the effects of previous rate hikes were yet to be fully realized. Moreover, there were risks of the economy slowing more sharply than estimated, minutes revealed.
The RBA has raised the key rate by 4 percentage points since May last year.
Further, members said some further tightening in policy may be required should inflation prove more persistent than expected. Members affirmed that they will be guided by the incoming data.
Michele Bullock took office as governor on September 18. She became the first female governor in the 63-year history of the central bank.
