Australian central bank tips rate cuts

The Reserve Bank of Australia (RBA) has left the door open to further falls in official interest rates, after revising down its estimates for economic growth and warning of the need to avoid a sharp slowdown in the months ahead.

The central bank today said growth in domestic demand had moderated significantly in recent months and that given the weakness in the global economy it expected the local economy would "remain below trend for some time."

The RBA also said it appeared likely its preferred measure of underlying inflation was nearing its peak in quarterly terms and would "begin to decline" in the next few quarters.

Its main task in coming months would be to find a balance between softer domestic economic conditions and the need for inflation to fall back to within its two to three per cent target band.

- AAP