RBA downplays likelihood of further rate cuts

Reserve Bank governor Philip Lowe has told a forum at the International Monetary Fund that Australia's economy is set to "return to trend growth" next year.

Lowe said the expected return to trend growth over the next year will help get the unemployment rate down and gradually lift wages.

"I don't think it's the right assumption to make that we're going to have a lot more work to do to get inflation back to target and growth back to trend," Lowe said.

This comes off the back of the release of positive employment figures with the Australian Bureau of Statistics reporting the unemployment rate fell to 5.2% in September.

The Australian economy added around 14,700 new jobs for the month, with full-time employment rising by 26,200 jobs offsetting a fall in part time jobs of 11,400.

The participation rate decreased, albeit very slightly, from its record highs to 66.1%, down from 66.2% in the previous month.

This fall in unemployment is a positive sign of some improvement in the Australian economy and a step closer to the RBA's full employment aim of 4.5%.

Speaking in Washington to the IMF, Lowe said that the central banks rate cuts and government tax cuts have been effective at supporting the domestic economy.

"The economy has been through a very soft patch over the past year but it is actually gradually improving.  The lower interest rates are working," he said.

Read more: Philip LoweInternational Monetary FundReserve BankAustralian Bureau of Statistics
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