The Reserve Bank says it could deliver another cash rate cut, as the Australian dollar remains “uncomfortably high”.

Low interest rates were working to stimulate the economy but the Australian dollar needed to depreciate, the RBA said in the minutes of its November meeting, when the board decided to leave the cash rate on hold at 2.5 per cent.

It said it was prudent to hold the cash rate steady and gauge the effects of previous cash rate cuts.

But the RBA said it would not “close off the possibility of reducing it further” should that be appropriate to support sustainable economic growth.

“Members noted that a lower level of the exchange rate would likely be needed to achieve balanced growth in the economy,” it said.

The RBA appeared to be maintaining a mild easing bias “as a precaution” to prevent an Australian dollar rally, JP Morgan economist Stephen Walters said.

“Removing the bias now, even if officials believed they had delivered enough stimulus, likely would trigger a rally in the Australian dollar, which is the polar opposite of what they want,” Mr Walters said.

JP Morgan expects a final rate cut from the RBA in February, Mr Walters said.

“With the economy still struggling to transition away from the mining capex boom as the main source of growth, it seems prudent for members to lean in the direction of perhaps providing slightly too much stimulus, rather than too little, particularly with the Australian dollar pulling monetary conditions the other way,” he said.

But HSBC chief economist Paul Bloxham said there would be no need to cut rates again.

“We remain of the view that the Australian dollar will fall modestly over 2014 and that the RBA will not need to cut rates further,” Mr Bloxham said.

The RBA said there was mounting evidence that lower interest rates were supporting activity in interest sensitive sectors and asset values, and would continue to for some time.

While recent economic data suggested the Australian economy was expanding at a below trend pace, the rebalancing of the economy from mining to non-mining investment would occur eventually, it said.

“Members noted that while the timing of investment upturns was very difficult to predict, it appeared likely that growth of the economy over the coming year would be below trend but that growth could reasonably be expected to pick up thereafter.”