MNI BRIEF: RBA Inflation Target 'About Right' - Review Panel

An update on the Reserve Bank of Australia' Review said feedback showed the bank's inflation target was "about right", and that the three-person panel were studying whether a separate monetary policy board should be created.

"The message we are hearing is that 2-3% is about right, people are happy with that," Professor Renee Fry-McKibbin, a panel member, said Thursday. However, she said the RBA's focus on achieving the target "on average over time" was considered "a little bit vague, no-one knows what that means." (See MNI BRIEF: RBA Review To Leave No Stone Unturned)

Former Bank of Canada official Carolyn Wilkins said that about half the feedback concerned governance and the composition of the board. She said some had proposed the creation of two boards: one for monetary policy decisions and one for operational issues. "Comments made about splitting it were more about the capacity of a single board to do both, particularly when the skills that are required to do each may be quite different," although she accepted that would tale legislative changes.