Australia’s Central Bank Sees Looser Credit Conditions After Rate Cuts
Australia’s Reserve Bank (RBA) has detected early signs that financial conditions are loosening. This comes after three interest rate cuts this year, bringing the cash rate down to 3.6%.
In a speech in Sydney, Assistant Governor Christopher Kent said credit access for households and businesses is improving. He also noted that bank funding costs, business debt, and household lending are responding to previous cuts.
Recent economic data adds complexity. Consumer spending stays strong, and housing prices hit new highs — signs that inflation pressures are not entirely gone. Kent cautioned against leaning too heavily on “neutral rate” models, which he says vary widely (between 1% and 4%). Instead, he wants the RBA to track broader financial indicators.
Looking ahead, the central bank plans to reevaluate its policy path based on new data and shifting risks. Despite the easing signals, uncertainty remains high.
