The transmission of monetary policy is still very effective in Australia and there has been ample scope to lower the cash rate sufficiently, Reserve Bank of Australia Assistant Governor Guy Debelle said Tuesday.
Seeking to allay fears over bank funding constraints, he said "this concern is misplaced." Not only do lending rates respond to changes in the Board's cash rate target, there is no sense in which the aggregate supply of credit appears to have been constrained by the ongoing changes in Authorised Deposit-taking Institutions' (ADI) funding patterns, he said in a speech in Adelaide.
He noted that there have been a number of significant changes to the structure of financial markets over the past five years. Regulatory reforms have often served to reinforce changes resulting from a self-reassessment or resulting from market pressures.
"While these forces have all been working in the same direction in the current environment, the regulatory reforms will aim to ensure that these changes to a more stable financial structure endure when the environment is less conducive to self-discipline and as market pressures abate," Debelle said.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.