The Reserve Bank of Australia on Tuesday cut benchmark interest rates for the first time in over four years, joining ranks with other major global central banks, as softening inflation allows room for easing policy.

Australia's central bank is cautious about cutting rates further given cost pressures in a hot labour market, but it will respond if inflation slows more quickly than expected, senior officials said on Friday.

Australia’s central bank has reduced its benchmark interest rate for the first time since October 2020 as the nation’s inflation cools.