RBA to Update Cash Rate Process - 8 Meeting instead of 11

The Reserve Bank of Australia (RBA) has announced that it will implement 10 recommendations from a comprehensive review of its operations. The review, initiated by the government, assessed the RBA's performance over the past three decades. RBA Governor Philip Lowe acknowledged the findings of the review, stating that Australia's current monetary policy framework is suitable. The changes include reducing the number of monetary board meetings from 11 to 8 per year, holding media conferences after the decision, and having the board deliver the statement of monetary policy instead of the governor. The RBA aims to have more time for detailed discussions on monetary policy strategy with the less frequent and longer meetings.

The RBA review also emphasised the need for a more open and dynamic RBA, empowering staff and optimizing performance. The central bank plans to embark on a significant program of cultural change and update leadership goals to foster inclusivity and open communication among staff. Strengthening standards and addressing potential conflicts of interest among board members were also addressed. The RBA agreed to prohibit members and entities they control from transacting in interest rate and foreign exchange derivatives and engaging in active trading in financial instruments.

To learn more, you can read the full article here.

Bribie Island Lending's view? - We see that there are less opportunities a year to raise or lower rates which will hopefully mean less stress at a time when the rates are on the rise. The only risk here is that with less meetings to act on, the RBA might implement larger rate rises or cuts to more heavily influence the economy.

As always, we're here to help negotiate the best rates for you!

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Photo by Tom Rumble on Unsplash

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