By Anhar Khanbhai

The Reserve Bank of Australia (RBA) has no plans to cut the cash rate any time soon, although it is clearly reserving that option according to minutes from the monetary policy meeting of the central bank's board on held on February 7.

Economic growth is expected to be in line with its long-run average while inflation is forecast to fall within its target range over the forecast period, which extends out to mid-2014.

A “disorderly resolution” of the euro area crisis is seen as the major risk to both global and Australian economic growth, the RBA said, but that possibility is not as worrying as it was in late 2011.

"While the financial situation in Europe remained fragile, the likelihood of an extremely bad outcome seemed to have diminished somewhat over the previous couple of months, partly reflecting actions by the European policymakers," the RBA said in the minutes.

The RBA's board members said the possibility of lower interest rates did not relate to Europe, but to domestic economic conditions.

"They judged that if demand conditions were to weaken materially, the inflation outlook would provide scope for further easing in monetary policy," the RBA said.

That is consistent with the RBA's apparently waning confidence over the net effect of the resources boom.

The growing uncertainty was evident in a comment in the RBA's quarterly monetary policy statement on February 10 that "history offers little basis on which to judge" the net impact on the economy of a resources investment boom and the offsetting effect of the high exchange rate.

The RBA says the boom might not drive the economy along as rapidly as expected, which would leave the door open for the cash rate to be cut from its current 4.25%.