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MNI BRIEF: RBA Took 'Considerable' Hit to Reputation - Review

MNI (PERTH)
(MNI) Perth

RBA internal review suggests its pandemic-era communications could have been clearer as it suffers reputational damage.

True

The Reserve Bank of Australia admitted it suffered "considerable" reputational damage by abandoning its 2024 yield curve control target as many people viewed it as a broken promise, according to a review of its forward guidance released Tuesday, that concluded communications by the central bank could have been conducted more clearly.

The frank self-assessment came as the RBA acknowledged that, in retrospect, greater emphasis on upside risks might have lead to an earlier decision to modify the time-based aspect of forward guidance that saw it target 0.1% for the 3-year, April 2024 bond. This was abandoned in November 2021 as global yields rose on higher-than-expected inflation.

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The Reserve Bank of Australia admitted it suffered "considerable" reputational damage by abandoning its 2024 yield curve control target as many people viewed it as a broken promise, according to a review of its forward guidance released Tuesday, that concluded communications by the central bank could have been conducted more clearly.

The frank self-assessment came as the RBA acknowledged that, in retrospect, greater emphasis on upside risks might have lead to an earlier decision to modify the time-based aspect of forward guidance that saw it target 0.1% for the 3-year, April 2024 bond. This was abandoned in November 2021 as global yields rose on higher-than-expected inflation.

Keep reading...Show less