The Reserve Bank says it may need to take a razor to interest rates again as Australia’s economic outlook continues to deteriorate.

The central bank says it held fire in March to assess the impact of its February rate cut, when it dropped Australia’s cash rate to a record low 2.25 per cent.

But the minutes of the RBA’s March 3 meeting, released on Tuesday, reveal another cut is very much on the cards, particularly in the wake of bleak economic growth figures.

“On the basis of the current forecasts for growth and inflation, members were of the view that a case to ease monetary policy further might emerge,” the RBA said.

December quarter economic growth figures had shown domestic demand remained weak with the economy tracking at a below-trend pace, the central bank said.

The figures suggested business investment could fare even worse than the RBA had expected, with all signs pointing to a subdued jobs market and sluggish wage growth.

Board members said the recent rate cut would provide further support to the economy and said “further easing over the period ahead may be appropriate to foster sustainable growth in demand”.

But they decided not to cut in March to wait for more data on how the economy was tracking and to watch how borrowers and savers reacted to the very low interest rates.

The RBA once again said it would work with other regulators to assess and contain risks that may emerge in the housing market, noting strong house prices in Sydney and Melbourne and growth in dwelling investment in the December quarter.

It noted that risks were beginning to build in commercial property markets, including developers of residential and non-residential property.