The Reserve Bank of Australia governor Philip Lowe has indicated he is in no hurry to join other central banks around the world in hiking rates any time soon.
The low inflation – which fell back below the Reserve Bank's 2-3 per cent target range last quarter – and a low probability of any rapid blowout in wages meant that offshore hikes had "no automatic implications for monetary policy in Australia," Dr Lowe said in a speech on Wednesday.
He noted these central banks lowered their interest rates to zero and also expanded their balance sheets greatly.
"We did not go down this route.
"Just as we did not move in lockstep with other central banks when the monetary stimulus was being delivered, we don't need to move in lockstep as some of this stimulus is removed."
His remarks came just hours after the official ABS figures that showed headline inflation slowed to 1.9 per cent from 2.1 per cent.
Dr Lowe's speech, to the Anika Foundation in Sydney, noted even with current rates of productivity growth, the nation "could sustain some increase in wages growth over time".
Titled The labour market and monetary policy, Dr Lowe used the speech to warn that the lack of wages growth was making households more reluctant to spend, and mean that debt levels are likely to stay higher for longer than was originally expected.