RBA deputy denies rate cut contradicted own forecasts

The Reserve Bank in February cut the official cash rate from 4.35 per cent to 4.10 per cent. (Flavio Brancaleone/AAP PHOTOS)

The Reserve Bank of Australia's deputy governor has defended the board's decision to cut interest rates despite its own staff warning inflation would stay higher in the long term.

In its February Statement on Monetary Policy, RBA economists forecast underlying inflation to remain above the bank's 2.5 per cent inflation target if it cut the cash rate in line with market expectations.