MNI BRIEF: RBA Review Targets Less Meetings, More Transparency

The Reserve Bank of Australia could have eight interest-rate decision meetings in future, down from its current schedule of 11, with a separate monetary policy committee given the power to decide on the direction of the cash rate, according to the Australian Government’s RBA Review published today.

The 294 page document made 51 recommendations that will fundamentally change how the RBA operates, makes monetary policy decisions and communicates strategy with the public via regular press conferences. The review also wants board members to deliver more speeches throughout the year detailing rate decisions and recommends the RBA publish more material it uses to back its policy direction.

The review did not recommend a change to the RBA’s 2-3% inflation target.

The Reserve’s structure will more closely resemble its international peers if the Government implements the recommendations (See: MNI: Separate Monetary Committee Seen Likely Under RBA Review).

The Federal opposition has given broad bipartisan support to any change to the RBA, but has not yet commented on the review’s publication. The Reserve will start working on the changes immediately and the reviewers have recommended a one-year turnaround for legislative change, MNI understands.

RBA Governor Philip Lowe will front media at 12pm AEST.