ANZ analysts point out that the RBA views 0.25% as the effective lower bound for its cash rate.

“If the RBA retains its aversion to negative rates, then reducing the cash rate below 0.25% while maintaining the floor of 0% on its rate setting corridor could lead to a counterproductive tightening in monetary conditions, unless it were accompanied by quantitative easing (QE). If the RBA were to adopt QE after the cash rate reaches 0.25%, there could be volatility in how much money banks hold at the RBA. This could see the cash rate fluctuate between 0 and 0.25%. We will focus on the mechanics of how the RBA implements monetary policy and how this could change once 0.25% is reached and QE is implemented.”