The effectiveness of the Reserve Bank of Australia's monetary policy is questioned, and it may take longer to cut interest rates

According to Jinshi Data, some observers believe that the Reserve Bank of Australia's monetary policy tools are more powerful than other central banks because most mortgages in Australia have variable interest rates and household debt is high.

HSBC chief economist Paul Bloxham said the RBA does not need to tighten policy as much as in the past to achieve results. However, a speech by RBA Assistant Governor Kent pointed out that there is nothing special about the effectiveness of its policy.

That is consistent with HSBC’s view that the RBA has tightened less aggressively than other central banks, so rate cuts may take longer. Bloxham warned that the RBA might not cut rates at all.