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RBA's Stevens says lower rates possible if needed for sustainable growth

Published 06/10/2015, 12:07 AM
Updated 06/10/2015, 12:09 AM
Stevens sees scope for lower rates

Investing.com - Further monetary easing is possible if needed to ensure sustainable growth, Reserve Bank of Australia Governor Glenn Stevens said Wednesday.

The economy hasn't picked up speed as hoped two years ago, Stevens told the Economic Society of Australia in Brisbane, adding that more demand growth is needed.

"The Reserve Bank will remain attuned to what it can do consistent with the various elements of its mandate - including price stability, full employment and financial stability. We remain open to the possibility of further policy easing if that is, on balance, beneficial for sustainable growth," he said.

However, he said the marginal effect from lower interest rates may be smaller than expected because it is already very low. But that doesn't mean "monetary policy is entirely powerless."

Stevens said the most recent indications were for a weakening in other areas of investment in the year ahea, but inflation is likely to remain low and even if the exchange rate were to fall there is unlikely to be a problem with excessive inflation, he said.

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