Greg Gibbs from RBS agrees the tone of the statement suggested "further cuts are much less likely."
"The fact that the RBA sees spare capacity still opens the door for additional cuts, but it appears to have upgraded its growth outlook to around trend ahead of this cut, and by cutting rates further today arguably it has edged the outlook slightly towards above trend growth," he said.
"Obviously there is considerable uncertainty... but for now the RBA has essentially returned to a neutral bias," he added.
Capital Economics, however, believes the central bank is not done.
"Our forecast that both GDP growth and underlying inflation will be weaker this year than the RBA expects suggests that rates could yet fall to 1.5 percent by December," Paul Dales, chief Australia & New Zealand economist at the research firm, wrote in a note.
He expects economic growth "will slow from 2.7 percent last year to just 1.8 percent this year, due to the lagged effects of the sharp fall in commodity exports. As such, "the cut in interest rates today is unlikely to be the last in this cycle," he said.
Australia's economy has been hampered by a sharp drop in commodity prices, weak external demand and persistently high unemployment.
A ballooning budget deficit, which Deloitte Access Economics estimates will be a whopping 46 billion Australian dollars this year, is putting the nation's triple-A credit rating at risk. Goldman Sachs warned last week that the plunge in iron ore prices in recent months could slash another $55 billion off government revenues over the next four years.
Australia emerged from the global financial crisis relatively unscathed, but it continues to struggle with narrowing the gap in its two-speed economy as its resources sector winds down.
Ben Jarman, senior economist at JP Morgan, says Tuesday's rate cut is a prelude to the RBA lowering its growth forecasts in its quarterly statement due Friday.
"In RBA's statement earlier in April and also in the minutes released a couple of weeks later, they mentioned the fact that the terms of trade have started to fall pretty sharply again and that's the kind of thing that can transmit to an even weaker outlook for mining investment than they currently have penciled in," Jarman said.