Reserve Bank of Australia Governor Philip Lowe has kept the option on the table to lower interest rates to zero and introduce quantitative easing, ABC News reported.
In his semiannual testimony to the House of Representatives Standing Committee on Economics, Lowe said that the central bank would be prepared "to do unconventional things if the circumstances warranted it," such as quantitative easing, ABC News wrote. He remains open to the possibility of reducing rates to zero but added that it is unlikely.
The central bank left its cash rate at a record low of 1.00% on Aug. 6, having reduced rates by 25 basis points each in June and July, and reiterated its willingness to ease further in a bid to reduce unemployment and bring inflation closer to its target.
Numerous central banks across the globe have already lowered rates in 2019 as economic growth concerns and trade tensions cloud the outlook.
Lowe told the parliamentary committee that there are signs the Australian economy may have reached a turning point. "Consistent with this, we are expecting the quarterly GDP growth outcomes to strengthen gradually after a run of disappointing numbers," he said.
The outlook is supported by lower interest rates, a weaker currency and stabilization of the housing market, Lowe said.
"From our perspective, we think the [Reserve Bank of Australia] would prefer to remain a conscientious objector to the currency wars that are starting to intensify elsewhere," said Ned Rumpeltin, European head of foreign exchange strategy at TD Securities. "Lowe expressed a willingness to ease more forcefully, but we do not think he seems to be in a rush to do so."
Australian economic growth "is likely to have troughed" toward mid-year 2019, but is expected to reach 2.5% in the full year and gradually improve to 2.75% in 2020.