RBA Review - Key Take Aways

The Australian Government has released its review into the RBA, see this link here. The findings are unlikely to surprise the market a great deal, as the local press has been reporting on likely outcomes over the past week. Some of the key take aways are outlined below:

• The new proposed dual board structure will leave the RBA somewhat similar to the BoE and BoC. There will be a new monetary policy board, along with a governance board.
• The new monetary policy board would still be chaired by the RBA Governor and have the Deputy Governor, along with the Treasury Secretary. It would also contain 6 external members with expertise in a wide area of economics. It would remain independent of the government as well.
• The 2-3% inflation target is recommended to be maintained, although the aim is to return inflation to the mid-point rather than average it over time.
• The proposal is for 8 meetings a year, instead of the current 11, while press conferences will also be held to explain decisions. External board members will be able to give speeches on interest rates. Votes will be published in the RBA minutes as well, but will be unattributable.
• These changes will require changes to the RBA act, which will have to pass Federal parliament, which is expected to be in place from July 1 2024.
• The RBA released a statement welcoming the review, see this link .