An Australian central banker has dismissed speculation that weak inflation will tie the US Federal Reserve's hands when it comes to hiking interest rates.
The Fed is widely expected to begin raising rates from near zero around the middle of the year.
But with the recent sharp fall in oil prices wreaking havoc on inflation and pulling US consumer prices down into deflationary territory, speculation has been mounting that the Fed may delay lifting rates.
Reserve Bank of Australia assistant governor Guy Debelle says while US inflation was low, the effect of lower oil prices was probably temporary.
He dismissed speculation that weak inflation would delay Fed tightening, saying the Fed had not changed its language on the matter for the past six months.
"Whether people listen to that is up to them," Dr Debelle told an economics conference on Monday.
"All I would say is that I'd probably listen to the people that actually have control over what they're actually going to do, and hear what they're saying, based on expectations around that."
Nomura head of macro products Jon Linton said the market was currently pricing in a hike around September or October, with slow rises from there.
He said the market's assumption was more cautious than it had been in the past.
"The market is right to price in a little bit less certainty because, at every stage over the past five years, the market has over-estimated how much is priced in," Mr Linton said.
Matthew Peter, chief economist at government-owned investment firm QIC, has previously said that any Fed delay that disappointed market expectations of a mid-year hike would give the RBA a lot more work to do.
It could push the Australian dollar back above 80 US cents, giving the RBA impetus to drop the cash rate as low as 1.25 per cent in 2015, he said.
The Fed's next policy decision is due on Thursday morning, Australian time.
Meanwhile, Dr Debelle has highlighted the popularity of Australia's commonwealth government bonds among offshore investors.
He said Australia's low debt levels, by world standards, and AAA credit rating were encouraging foreigners to buy the majority of commonwealth government bonds.
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