Reserve Bank boss says negative rates ‘extraordinarily unlikely’

RBA chief Philip Lowe says it’s “extraordinarily unlikely” Australia will need negative interest rates.

Philip Lowe says low cash rate alone may not necessarily stimulate the economy. Picture: AAP

Reserve Bank governor Philip Lowe says it is “extraordinarily unlikely” that negative interest rates will be needed to meet Australia’s inflation and growth targets.

Nonetheless, the RBA chief reiterated that a low cash rate alone may not necessarily stimulate investment.

“I’m not going to speculate on ... negative interest rates and quantitative easing in Australia, other than to say that negative interest rates are extraordinarily unlikely in my country,” Dr Lowe said during a presentation at the International Monetary Fund and World Bank meetings in Washington.

It came after a drop in the jobless rate gave the RBA more room to move before any further cuts to the cash rate.

The Reserve Bank has sliced the official cash rate three times this year to a record low of 0.75 per cent in a bid to drive unem­ploymen­t lower amid sluggish economic growth.

Reuters