The Reserve Bank has paved the way for further cuts to the official interest rate. In a major speech this week, RBA deputy governor Guy Debelle said the RBA was prepared to “go fast, go hard and not die wondering” by stimulating the economy.

He also said that a lending slowdown could hurt the economy, commenting: “There is a risk that a reduced appetite to lend will overly curtail borrowing with consequent effects for the Australian economy.”

Noting the Reserve Bank had “repeatedly” said the next move in interest rates was more likely up than down, Debelle said there was “still scope for further reductions in the policy rate”.

“It is the level of interest rates that matters and they can still move lower,” he said, in remark¬s that could foreshadow a reappraisal of the outlook by the Reserve Bank board when it next meets in February. The official interest rate has been unchanged since August 2016, when former governor Glenn Stevens reduced the cash rate to a record low of 1.5% - the final in a series of cuts that has seen the rate fall from a 10-year peak of 4.75 per cent in late 2011.