The Reserve Bank of Australia (RBA) will be doing things different from January 2024 after the conclusion of an independent review that was commission by the Australian Government.
The report had presented a number of changes and recommendations to better communicate to Australians.
After each cash rate meeting held by the RBA board, the governor, currently Philip Lowe, will conduct a conference to the media explaining their final decision and the basis behind it. This will further offer the opportunity to ask a number of questions for the benefit of the public. From September 2023, Michele Bullock will assume the important role as governor once Philip Lowe’s seven year term expires.
Commencing from January 2024, the RBA board will meet eight times per year to assess the cash rate instead of the current system of eleven (December being the only month they don’t meet). It’s also scheduled that the eight meetings held will run longer with the plan for the board to discuss the assessment to the wider community within the RBA.
Philip Lowe, the current RBA governor highlighted:
“the less frequent and longer meetings will provide more time for the board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication. “The staff will have more time for analysis, with less time spent preparing summaries of recent developments.”
What is to actual role of the RBA
The RBA conduct monetary policy, determine payments system policy, work to maintain a stable financial system, issue the nation’s banknotes, operate the core of the payments system and provide banking services to the government. Assessing the cash rate is one of many responsibilities held by the RBA.
What do you think about the new changes?
This looks to be a very positive step forward to help Australian understand the influential factors that may be dictating the change in cash rate. The media conferences will also be more easily assessable while many people find it easier to digest our understand the basis behind decision rather than reading lengthy reports that can be very complex.
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August 2023
