RBA Comments Reinforce Restrictive Policy Stance
The Australian dollar has continued to hold firm near multi-week highs after comments from the Reserve Bank of Australia (RBA) reinforced its restrictive policy stance.
RBA Assistant Governor Christopher Kent said that earlier rate increases were working as intended, with tighter monetary conditions weighing on consumer spending and slowing broader economic activity.
He noted that housing credit growth had slowed, with a noticeable decline in new home lending, and said financial conditions overall remained somewhat restrictive.
The RBA kept its cash rate at 4.35% this week after raising it by 75 basis points since February, but Governor Michele Bullock warned that policymakers remain concerned about inflation and are prepared to raise rates again if needed.