SYDNEY A senior Australian Central Banker hinted Friday that the Central Reserve Bank of Australia (RBA) will follow the lead of the U.S. Federal Reserve and cut official interest rates.

An assistant governor of Australia's Central Bank, Glenn Stevens, told an economic forum that "expansionary macropolicies" are required to insulate Australia from any global economic downturn.

According to an AFP report, as Australia enters an election year, the prospect of an economic downturn in the U.S. dragging Australia into recession is dominating both political and investor circles here.

The U.S. Federal Reserve's Open Market Committee reduced its official interest rates by half a percentage point Thursday to try to stave off a recession in the world's largest economy.

In an address to the Committee for Economic Development of Australia in Melbourne, Stevens said Australia "could reasonably expect quite good gains in exports in the coming year, even if they did not match the very strong pace of last year".

However, any "global slump ... would be a serious problem for Australia.

"What is important in such a situation is the capacity and willingness of the major countries to counter, if needed, contractionary forces with judicious use of expansionary macro policies," Stevens said.

"In the U.S., if the current rate of core inflation of about 2.5 percent turns out to be a cyclical peak, it will be the lowest one for more than 30 years. European inflation is even lower.

"Hence there is no major impediment here to the use of expansionary policies if they are needed. U.S. monetary has already turned in that direction."

Stevens' comment is the clearest indication yet that Central Bankers here believe cutting official rates, which currently stand at 6.25 percent, would not add to inflationary pressures.

Economists expect Australian economic growth to slow to around 2.7 percent this from 4.2 percent in 2000.