RBA Says Rate Hikes Working as Intended, but Inflation Persists

Australia's central banker says recent rate hikes are working as intended to slow down economic activity and inflation. Reserve Bank of Australia Assistant Governor Christopher Kent made this statement at a Reuters event in Sydney, citing tight monetary conditions that are weighing on consumer spending.

Kent noted that housing credit growth has started to slow, with a decline in new home lending. While not all financial indicators show the same trend, Kent said that overall financial conditions were somewhat restrictive.

The Reserve Bank of Australia left interest rates steady at 4.35% this week, after hiking by 75 basis points since February to combat inflationary pressures. The bank's long-term target for inflation is between 2% and 3%, but core inflation currently runs at an annual 3.6%.