SYDNEY, Aug 13 (Reuters) - A top Australian central banker said on Thursday the three cash rate increases earlier this year were having their intended effects, with tight monetary conditions weighing on consumer spending and slowing broader economic activity.
Speaking at a Reuters NEXT Newsmaker event in Sydney, Reserve Bank of Australia Assistant Governor Christopher Kent said it would take "some time for tighter monetary policy to have its full effect on economic activity and inflation."
Housing
credit growth, which moves closely with house prices, has started to slow, with a noticeable decline in new home lending, Kent said.
While not all financial indicators point in the same direction, the bank's assessment is that financial conditions overall were somewhat restrictive, Kent said.
"The current cash rate is around the top of the range of central estimates of the neutral rate from the various models we estimate," he said, but added there was considerable uncertainty around the bank's neutral rate estimates.
The central bank this week left interest rates steady at 4.35%, having already hiked by 75 basis points since February in an effort to restrain stubborn inflationary pressures.
RBA Governor Michel Bullock emphasised the policy-making board was concerned inflation might not cool as hoped and was ready to raise rates again if needed.
Core inflation ran at an annual 3.6% in the June quarter, well above the RBA's long-term target band of 2% to 3%.
Markets imply around a 75% chance of a further increase to 4.60% by December, though investors assume that will likely mark the end of the tightening cycle.
(Reporting by Wayne Cole and Renju Jose in Sydney; Editing by Tom Hogue and Shri Navaratnam)
