Outgoing Reserve Bank of Australia (RBA) governor Philip Lowe has indicated potential further increases in interest rates amid challenges in the housing market.
In his final appearance before the House of Representatives Standing Committee on Economics, Lowe voiced concerns regarding rent freezes and handouts for potential home buyers, emphasizing that only an uptick in housing supply could stabilize a market grappling with some of the world's priciest land.
While the RBA has recently raised interest rates in response to inflation, Lowe admitted that central banks' COVID-era policies played a role in the current inflationary trend. He stressed that, without reverting to pre-Covid productivity levels, both interest rates and inflation might persist at elevated levels for an extended period.
As he prepares to exit the central bank, Lowe clarified that he would be stepping away from the public eye and does not plan to be a public commentator post-retirement. This announcement followed Treasurer Jim Chalmers' July revelation that Lowe's seven-year term would not be extended.
Reflecting on his tenure, the top central banker expressed some regrets, notably the RBA's intensive response to the COVID-19 pandemic. Despite these reflections, the bank remains steadfast in its commitment to address Australia's soaring inflation, which has reached its highest in over 30 years.
