Australia’s central bank cut interest rates for the first time since 2020 as inflation approaches the top of its 2-3 percent target, while saying it will take a cautious approach to future decisions.

The Reserve Bank lowered its cash rate by a quarter-percentage point to 4.1 percent on Tuesday, in a widely expected decision. It warned that lowering borrowing costs too quickly in the period ahead could result in dinsinflation stalling.

“While today’s policy decision recognises the welcome progress on inflation, the board remains cautious on prospects for further policy easing,” the rate-setting board said. “The board will continue to rely upon the data and the evolving assessment of risks to guide its decisions.”

The Australian dollar briefly climbed after the decision before paring gains, while yields on the policy-sensitive three-year government bond increased.