The RBA may make further interest rate reductions. In its quarterly Statement on Monetary Policy, the RBA left the door open to another rate decrease after cutting the official rate to 2% last week.

“The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target,” it said.

The RBA also revealed a gloomier economic outlook than forecast in its previous statement in February, with concerns about Chinese growth and local business investment.

It said economic growth was expected to be in the 2.5-3.5% range in 2015-16, a quarter of a percentage point weaker than previously predicted. “GDP growth is forecast to remain below trend for a bit longer than had been anticipated,” the RBA said.