The Reserve Bank of Australia's decision to cut interest rates on November 4 was a close call, the minutes from its November 1 board meeting released yesterday show.

Australia's central bank cut its cash rate to 4.5 per cent from 4.75 per cent on November 4.

"A case could have been made for leaving rates unchanged on the basis that, unless the world economy turned down in a serious way, the expansionary effects of the high terms of trade and the associated investment build-up would, in time, assert themselves more fully, even though recent conditions had been softer than expected," the minutes said.

"In that event, policy settings on the tight side of normal would be appropriate over the medium term," they said.

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"In the meantime, the expectation that policy might be eased was itself being reflected in a reduced level of market interest rates."

The board said the case for easing rates was that there had clearly been material changes to underlying inflation and its outlook and the downside risks from the global economy had increased.