Highlights
The Reserve Bank of Australia's Governor, Phillip Lowe, has announced in a speech today changes to the RBA's operations following an independent review provided to the government in April. The government has already pledged to implement all of the review's recommendations in legislation to be introduced to parliament in coming months, but today's speech has provided details of changes that the RBA can make prior to legislative changes. These changes are in line with the review's recommendations.
The changes announced by Lowe today include the following:
1. From 2024, policy meetings will be held by a newly established Monetary Policy Board eight times per year, rather than eleven times as is currently the case. Four of the meetings will be on the first Tuesday of February, May, August and November. The other four meetings will be held midway between these meetings. Dates for 2024 meetings will be published soon.
2. Policy meetings will now typically begin on a Monday afternoon and conclude on a Tuesday morning, with the policy decision to be announced, as is currently the case, on the Tuesday at 2:30 p.m. Sydney time. The statement accompanying the policy decision will be issued by the Board, not the Governor, and will be followed by a press conference by the Governor at 3:30 p.m. Sydney time.
3. The quarterly Statement on Monetary Policy will now be published on the same day as the meeting held in February, May, August and November, rather than on the following Friday, as is currently the case.
Lowe argued that less frequent and longer meetings"will provide more time for the Board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication." He also noted that holding a press conference after each meeting will improve communication and transparency.
Other recommendations made by the review will not be implemented until after the relevant legislative changes are made. In particular, Lowe advised that the RBA will not establish an expert advisory board until a new Monetary Policy Board begins operations, arguing that it would be inappropriate to"lock" the new Board into a particular approach at this stage.
The changes announced by Lowe today include the following:
1. From 2024, policy meetings will be held by a newly established Monetary Policy Board eight times per year, rather than eleven times as is currently the case. Four of the meetings will be on the first Tuesday of February, May, August and November. The other four meetings will be held midway between these meetings. Dates for 2024 meetings will be published soon.
2. Policy meetings will now typically begin on a Monday afternoon and conclude on a Tuesday morning, with the policy decision to be announced, as is currently the case, on the Tuesday at 2:30 p.m. Sydney time. The statement accompanying the policy decision will be issued by the Board, not the Governor, and will be followed by a press conference by the Governor at 3:30 p.m. Sydney time.
3. The quarterly Statement on Monetary Policy will now be published on the same day as the meeting held in February, May, August and November, rather than on the following Friday, as is currently the case.
Lowe argued that less frequent and longer meetings"will provide more time for the Board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication." He also noted that holding a press conference after each meeting will improve communication and transparency.
Other recommendations made by the review will not be implemented until after the relevant legislative changes are made. In particular, Lowe advised that the RBA will not establish an expert advisory board until a new Monetary Policy Board begins operations, arguing that it would be inappropriate to"lock" the new Board into a particular approach at this stage.
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