Investing.com - Scope for a further cut in Australia's cash rate is possible from the current record low 2%, but the Reserve Bank must consider financial stability as its main concern, RBA Governor Glenn Stevens said Wednesday.
"The question of whether (cash rates) might be reduced further remains, as I have said before, on the table," Governor Glenn Stevens said in a speech.
Risk-taking behavior most responsive to monetary policy is of the financial type - which is fine up to a point because it is a prerequisite for the "real economy" risk-taking wanted, Stevens said.
"But, beyond a certain point, it can be dangerous. Deciding when such a point has been reached is, unavoidably, a highly judgmental process," Stevens said.
"I note that the board's post-meeting statements routinely refer to seeking a stance of policy that will 'most effectively foster sustainable growth and inflation consistent with the target.' The adjective 'sustainable' is used deliberately and financial sustainability is very definitely one of the things we have in mind," he said.