Philip Lowe announces the Reserve Bank is changing forever and reveals how it will affect interest rate decisions for Australians
- Reserve Bank governor announces permanent changes
- Philip Lowe faces being replaced by mid-September
Embattled Reserve Bank Governor Philip Lowe has revealed the major changes that will affect Australia’s key interest rate making body following a review.
From next year, the RBA would hold eight board meetings instead of 11 with decisions to be made in February, May, August and November.
The meetings will run from Monday afternoon into Tuesday morning with a 3.30pm media conference to be held after each meeting.
An unattributed vote will also be made public on where the nine board members stood on monetary policy.
A specialist monetary policy team, made up of economists, would be making decisions instead of the current approach where corporate leaders are also asked for input.
Dr Lowe, who faces being replaced when his seven-year term ends on September 17, on Wednesday said he was happy to have his job.
‘I don’t know if I’m the happiest central banker but I’m the most fortune,’ he told an Economic Society of Australia lunch in Brisbane.
Embattled Reserve Bank Governor Philip Lowe has revealed the major changes that will affect Australia’s key interest rate making body following a review
He faces being the shortest-serving governor in almost three decades after suggesting in 2021 interest rates would stay on hold at a record-low of 0.1 per cent until 2024 ‘at the earliest’.
But interest rates since May 2022 have risen 12 times to an 11-year high of 4.1 per cent, marking the most aggressive pace of monetary policy tightening since 1989.
The Reserve Bank is expecting inflation to remain above its 2 to 3 per cent target until mid-2025, with May’s rate moderating to 5.6 per cent, down from 6.8 per cent.
‘We’re deadly serious about this,’ Dr Lowe said on Wednesday.
Before Dr Lowe’s term ends, Treasurer Jim Chalmers has confirmed he will be travelling to India with the Reserve Bank chief for the G20 summit.
‘I will be travelling to India with governor Lowe,’ he told reporters in Melbourne on Wednesday.
‘He and I will work closely together to represent Australia’s interest in that forum.’
The RBA review was conducted by Professor Carolyn A. Wilkins, a former senior deputy governor at the Bank of Canada; Professor Renée Fry‑McKibbin, a professor of economics at Australian National University; and Dr Gordon de Brouwer, Secretary for Public Sector Reform.