In a speech, RBA Assistant Governor, Chris Kent, indicated that while the effects of previous monetary tightening have not yet been fully realized, “some further tightening ” might be on the horizon to keep inflation in check.
Kent asserted that the policies currently in place are beginning to stymie demand growth, a crucial step towards mitigating inflation.
“The lags of transmission mean that some further effects of rate increases to date are still to be felt through the economy, which will provide further impetus to lower inflation in the period ahead,” he added.
However, with inflation persisting at elevated levels, Kent hinted at the necessity for additional measures. “The Board is paying close attention to economic developments here and overseas, and some further tightening of monetary policy may be required to ensure that inflation, which is still too high, returns to target in a reasonable timeframe.”
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