A toolkit of unconventional monetary policies is being prepared by the Reserve Bank.

Today it has outlined the possibility that alternative policy tools such as a negative interest rates or asset buying could be put in place.

Chief economist Yuong Ha told Heather Du Plessis-Allan these tools could be brought in if the OCR was seen as ineffective.

"To help give monetary policy some additional head room should we need it. It's an not about an imminent need to use these tools right now, but it's about being prepared should we need to." 

He says that the bank has been searching for different tools.

"All Federal Banks are operating in  a low inflation, low interest rate environment, and at some point you reach a natural limit around the use of a short term cash rate as your main policy tool."