Australian central bank chief Philip Lowe reiterated that he’s prepared to ease policy further if needed, but again pushed back against the idea of interest rates turning negative in his economy.
The Reserve Bank’s board has reduced borrowing costs three times in the past five months as it tries to boost economic growth and encourage hiring. At 0.75%, the record-low cash rate is also helping keep a lid on the local currencyas other major central banks ease in response to heightened international risks, ranging from the U.S.-China trade war to Brexit.
“We are confident that these reductions are helping the Australian economy and supporting the gentle turning point in economic growth,” Lowe said Tuesday in the text of a speech in Canberra. “Low interest rates are supporting jobs and overall income growth. At the same time, though, we recognize that monetary policy is not working in exactly the same way that it used to.”
The governor delivered his remarks in the Sir Leslie Melville Lecture, which commemorates one of Australia’s pre-eminent economists of the interwar and post-World War II years. In his address, Lowe surveyed the global problem of high savings and low investment, noting issues ranging from aging populations to companies’ reluctance to invest.
Source : Bloomberg