Reserve Bank governor Philip Lowe has defended Australia's record low interest rates but signalled any further cuts are unlikely while all but ruling out quantitative easing | swrighteconomy JennieDuke
Addressing the House of Representatives economics committee on Friday, Dr Lowe also said it was too early to determine the full impact of the coronavirus outbreak, while adding the hit to economic growth from the recent bushfires would be offset by year's end as communities were rebuilt.
RBA governor Philip Lowe said if interest rates had not been cut, the economy would have deteriorated.The bank took the official cash rate to a record low of 0.75 per cent last year, saying it wanted to drive down the unemployment rate to at least 4.5 per cent in a bid to get the economy growing faster and to boost wages.
The cuts have been criticised in some circles because of their impact on people who depend on savings for incomes, such as self-funded retirees.Dr Lowe said the RBA understood the impact on savers, but said one of the reasons for lower interest rates was global in nature."World interest rates have moved lower over the past decade.
"If interest rates had not been reduced last year this adjustment in household finances would have been more difficult and the overall economy would have suffered," he said. "The lower interest rates have made it easier for people to manage their debts and, on the other side of the balance sheet, they have boosted asset values.
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