The Reserve Bank is preparing a tool kit of unconventional monetary policies to use if the official cash rate no longer proves effective.
The central bank has decided it could use tools such as cutting interest rates below zero, lending banks money with conditions and buying government bonds, should it be confronted by a shock.
The assistant governor, Christian Hawkesby, told our business editor Gyles Beckford there is no need to use them at the moment - but it's prudent to be prepared.
The official cash rate is currently at a record low 1 percent Economists expect a cut to 0.75 pct or even 0.5 pct at the next review on March the 25th will be needed to counter the effects of the Covid-19 virus on the economy.
