RBA says rate cuts coming soon, IMF warns on inflation

The Reserve Bank has been warned by the IMF it may need to raise rates if inflation can't be tamed. (Joel Carrett/AAP PHOTOS)

The Reserve Bank of Australia says it will soon be able to start cutting interest rates, assuming data continues falling in its favour.

The welcome indication, flagged in the central bank board's December meeting minutes, does though come as the International Monetary Fund warns the RBA may need to raise interest rates if the "significant" risk that inflation stops falling eventuates.