Australia’s long-term bond rate would be testing 1.5 per cent if not for the Reserve Bank of Australia’s bond-buying intervention, governor Philip Lowe says, as part of his defence of the policy given rising bond yields and a stubbornly firm currency.

Dr Lowe told the House Standing Committee on Eeconomics on Friday that the $100 billion, six-month, bond-buying program has lowered long-term bond yields by about 0.3 of a percentage point.