RBA Official Says Rate Hikes Working as Intended

The Reserve Bank of Australia's Assistant Governor Christopher Kent stated that the recent three cash rate increases have had their intended effects on the economy. Speaking at a Reuters NEXT Newsmaker event in Sydney, Kent said that tight monetary conditions are weighing on consumer spending and slowing broader economic activity.

Kent noted that housing credit growth has slowed significantly, with a noticeable decline in new home lending. He emphasized that while not all financial indicators point in the same direction, the bank's assessment is that financial conditions overall are somewhat restrictive.

The current cash rate of 4.35% is around the top of the range of central estimates of the neutral rate from various models estimated by the bank. Kent cautioned that there is considerable uncertainty around these estimates.