RBA's Kent says Board sets level of the Cash Rate it judges will achieve low and stable inflation and full employment, adds borrowing costs have increased, mortgage payments have risen and conditions in the established housing market have turned down

Says: Australian dollar has appreciated over the year to date. Moreover, the growth of aggregate demand appears to be slowing and this is intended and is needed to bring inflation back to the target. Housing market appears to have softened by somewhat more than the recent increase in interest rates would imply, contributing to financial conditions potentially being a bit more restrictive than otherwise. Conversely, resilient global demand because of AI related investment as well as high yields offshore because accumulation of large public debts will tend to contribute to financial conditions in Australia being less restrictive than otherwise. In conclusion, evidence suggests that monetary policy in Australia is somewhat restrictive, and that the tightening earlier this year is working. Elevated exchange rate helps in curbing inflation by reducing domestic import prices. Cash rate is near top of range of central estimates of neutral from various models, and neutral rate estimates have significant uncertainty. Tax changes in federal budget likely curbed demand in established housing market. Possibility of rates increasing further if risks materialise.