* RBA's Lowe says rate cuts, lower A$ helping economy
* Expects inflation to be tepid for some time
* Says economy adjusting well to fading mining boom (Adds details from speech, context, market reaction)
By Swati Pandey
SYDNEY, Sept 22 (Reuters) - The Reserve Bank of Australia governor Philip Lowe gave an upbeat assessment of the economy in his first public appearance on Thursday, with growth underpinned by two rate cuts this year, a lower currency and stable commodity prices.
Newly appointed Lowe, who was speaking before a parliamentary economics committee, however, expects inflation to remain weak for some time but pick up gradually as conditions in labour market strengthen.
"Our judgement is that (the) easing in monetary policy is supporting jobs and economic activity, and thus improving the prospects for sustainable growth and inflation outcomes consistent with the medium-term target."
Earlier this week, the RBA hinted at a stable outlook for interest rates in minutes of its September meeting. with consumer prices running below the central bank's 2-3 percent target, policy makers are worried low inflation could feed into wages and crimp price expectations.
The consumer price index (CPI) fell in the March quarter for the first time since the 2008 global financial crisis. Retail sales have been anaemic and consumer confidence is falling.
Futures market lowered expectations of another cut this year, implying a 24 percent chance by Christmas from over 30 percent earlier this week. The Australian dollar AUD= extended gains on Lowe's speech to hit an intra-day high of $0.7650, a level last seen on Sept.9.
The central bank chief appears before the committee twice a year to answer questions on the economy and monetary policy. A career central banker, Lowe has just taken over from Glenn Stevens who spent a decade in the top job.
Recent data showed gross domestic product (GDP) grew 3.3 percent in the year to June, the fastest pace in four years, while the jobless rate hit a three-year low in August. the economy is adjusting reasonably well to the unwinding of the biggest mining investment boom in more than a century. This is a significant achievement," Lowe said.
Yet employment still dipped in the month and the swelling numbers looking to work longer hours pointed to plenty of spare capacity in the labour market, a trend that could put the RBA in a tight spot and force more rate cuts.