The RBA is likely to continue to lift the cash rate by "gradual" amounts so long as the economy continues to recover, according to the minutes of the 3 November Monetary Policy Meeting released today.

Members of the board came to the conclusion that conditions in the global and Australian economies were significantly better than had been expected earlier in the year, when rates fell to record lows of 3%.

As a result, "looking ahead, members expected that if economic conditions evolved as expected, further gradual adjustment in the cash rate would most likely be appropriate over time, though the pace of the adjustment remained an open question".

The pace of adjustments, the board said, was a case of balancing risks: "On the one hand, business and consumer confidence could prove fragile, and economic activity at home and abroad might slow more than expected as the effects of stimulus measures faded...on the other hand, a lengthy period with interest rates at a very low level carried its own risks, particularly once the threat of serious economic weakness had passed.