The threshold for undertaking QE in Australia "has not been reached, and I don't expect it to be reached in the near future", Philip Lowe, governor of the Reserve Bank declared last night.In a much anticipated speech on unconventional monetary policy, Lowe surveyed international experience and outlined some of the hows and whys of QE if domestic economic conditions cornered the RBA board into following the path of quantitative easing.If quantitative easing were resorted to "the international experience is that in stressed market conditions, the central bank can help stabilise the situation by buying government securities," Lowe said in Sydney."Our current thinking is that QE becomes an option to be considered at a cash rate of 0.25 per cent, but not before that," he said.At a cash rate of 0.25 per cent, the interest rate paid on surplus balances at the Reserve Bank would already be at zero given the corridor system we operate. So from that perspective, we would, at that point, be dealing with zero interest rates."This is 50 basis points less than the current cash rate of 0.75 per cent, target set in October and already half the level of the cash rate in force as recently as June."It is a reasonable question to ask what might be the threshold to undertake QE in Australia," Lowe said."It is difficult to be precise, but QE would be considered if there were an accumulation of evidence that, over the medium term, we were unlikely to achieve our objectives. In particular, if we were moving away from, rather than towards, our goals for both full employment and inflation, the purchase of government securities would be on the agenda of the Board. "In this world, I would hope other public policy options were also on the country's agenda," Lowe said, meaning fiscal stimulus over and above showboating around infrastructure funding.Lowe said that "at the moment we are expecting progress towards our goals over the next couple of years and the cash rate is still above the level at which we would consider buying government securities. So QE is not on our agenda at this point in time."He said the Reserve Bank board "continues to discuss what role it can play in ensuring that this progress takes place and how it might be accelerated."It recognises the benefits that would come from faster progress, but it also recognises the limitations of monetary policy and the importance of keeping a medium-term perspective squarely focused on maximising the economic welfare of the people of Australia. "There may come a point where QE could help promote our collective welfare, but we are not at that point and I don't expect us to get there."Lowe was speaking at a dinner of Australian Business Economists.