The Reserve Bank of Australia says it is more likely to cut the cash rate further than raise it above its current level.
RBA governor Glenn Stevens told a parliamentary committee on Friday the central bank was willing to cut the cash rate, currently at three per cent, further if necessary.
"It's fair to say that we have maintained a bias to ease at the moment," he said.
Mr Stevens said that with annual inflation expected to remain within the RBA's target range of two to three per cent for the next two years, the central bank had room to cut further if economic growth slowed.
"Rates are low, it seems appropriate they should be and the statement we made is that, given the inflation outlook, we would have scope, if needed, to ease a bit more," he said.
"I think it is a fair reading of that to say that an easing (of the cash rate) is more likely than a tightening."