News: Australia's central bank says neutral rate at least 2.5%

SYDNEY, Sept 8 (Reuters) - Australia's top central banker on Thursday said interest rates were closer to neutral levels after a run of hikes, but there was much uncertainty about how much further they might have to rise to bring demand back into line with supply.

Answering questions after a policy speech, Reserve Bank of Australia (RBA) Governor Philip Lowe said the neutral level - one that neither stimulates nor retards growth - was at least 2.5%. Rates are currently at 2.35% having been lifted by 225 basis points in just five months.

"We are closer now to estimates of neutral, but we could still be stimulatory, we could be too tight," said Lowe.

Lowe added the RBA was very conscious that monetary policy acted with a lag and that rates had already risen sharply.