Wanted - a thick-skinned central banker

Glenn Stevens won't be swayed to stay any longer than he has to.

After 10 years as governor of the Reserve Bank of Australia, Stevens calls it a day in September.

It will be a huge loss to the policy making of Australia and comes at a time of great turbulence and uncertainty in the global economy.

Treasurer Scott Morrison, a huge fan of the governor who he has labelled the "rock star of central bankers", says he won't be doing another encore.

"Glenn has great plans to spend more time in our beloved (Sutherland) Shire," Morrison told the National Press Club this week.

Stevens' retirement came up during his six-monthly appearance in front of the House of Representatives economics committee when he was asked what qualities his replacement should have.

"A thick skin is probably the primary one, actually," Stevens drolly replied.

Morrison will have the final say on the appointment, but deputy governor Philip Lowe looks set to get the gig if Stevens has his way.

"I think the deputy governor has all the admirable qualities needed and more, more than me," Stevens says modestly.

Stevens has been in the upper echelons of the central bank for 20 of the 25 years of Australia's remarkable unbroken economic expansion.

He was appointed assistant governor for economics in 1996, deputy governor in 2001 and was awarded the top job for an initial seven years in 2006 by former treasurer Peter Costello.

He was reappointed by the Labor government for a further three years in 2013.

In that time, Stevens has seen it all.

At the helm of the central bank board he has helped steer the economy through the Asian financial crises, the bursting of the dotcom boom and the global financial crisis where other major economies fell into recession.

And his work is far from done.

Financial markets are pricing in a 90 per cent risk that the RBA will be forced to cut the cash rate to 1.75 per cent by the time Stevens retires.

The cash rate has been at a record low of two per cent since May.

The minutes of the RBA's February board meeting released this week explained a low inflation outlook may provide scope for easier monetary policy "should that be appropriate".

In the meantime, the board will assess whether recent market turbulence is foreshadowing weaker global and domestic demand.

Market volatility has resulted from the uncertainty about the outlook for global economic growth, particularly China.

In a worrying assessment by independent global forecaster Oxford Economics, it predicted that Australia could dip into recession should China suffer a steep downturn.

In this scenario, its modelling suggests a hard landing in the Chinese economy would result in the iron ore price tumbling to $US23 per tonne from around $US46 now, Australia's terms of trade falling further and the federal budget suffering a blow-out.

But there are two buffers that would help shield the economy from a prolonged recession.

It says in such an event the Australian dollar would drop 10 cents and the RBA would slash the cash rate by 175 basis points to just 0.25 per cent by September.

Not the sort of finale Stevens would be reckoning on at this stage.