SYDNEY Australia's central bank Governor Philip Lowe said on Wednesday it remains to be determined whether there is more work to be done on monetary policy but it is possible that further tightening would be required to bring inflation to heel.

Speaking in Brisbane, Lowe said there has been a "significant and rapid" tightening and the rate-setting policy board is very conscious that policy operates with a lag, with the full effects yet to be felt.

"It takes time for households and businesses to adjust their spending and investment plans, and there are still significant resets of low fixed-rate loans to come," said Lowe.

The Reserve Bank of Australia held rates steady last week, having raised interest rates by a whopping 400 basis points since May of last year to an 11-year high of 4.1%, saying it wanted time to assess the impact from past hikes.

Lowe noted that the board would have an updated set of economic forecasts next month as well as a revised assessment of the balance of risks, which would help to inform the August decision.

Markets expect that the central bank may have to hike two more times to tame inflation.

"Whether or not this (further tightening) is required will depend on how the economy and inflation evolve," Lowe said.

SEA CHANGES AT RBA

The governor spent a large portion of his time on Wednesday laying out some of the changes that the board has decided on, after a review commissioned by the government recommended sweeping changes to the decades-old institution.

From 2024, the RBA will meet eight times a year, compared with 11 times currently, with meetings set to last longer than currently, Lowe said.

The governor would hold a news conference after each meeting, and quarterly statements on monetary policy, which include the bank's economic forecasts, would be released at the same time as the policy decision.

The board will also decide on some other recommendations from the review, including the publication of an unattributed vote count, at a later date.

Treasurer Jim Chalmers is set to announce whether or not to extend Lowe's current term, which ends in September, and a decision could come as soon as this week.

Lowe has been under a cloud since repeatedly saying in 2021 that interest rates would not rise until 2024, only to reverse course and hike in mid-2022 when inflation unexpectedly surged.

(Reporting by Stella Qiu; Editing by Muralikumar Anantharaman and Edmund Klamann)