MPB members should be more accountable for their role in setting monetary policy, the review said. The review recommended the government should legislate the changes to commence from July 1, 2024. (Reporting by Wayne Cole; Editing by Sam Holmes)
Messaging: wayne.cole.thomsonreuters.com@reuters.net)) SYDNEY, April 20 (Reuters) - An independent review of
the Reserve Bank of Australia (RBA) has recommended creating a
specialist board to manage monetary policy that would be chaired
by the governor and have a dual mandate of price stability and
full employment.
The central bank should keep its flexible inflation target
of 2-3% but aim to return inflation to the mid-point rather than
average it over time. Importantly for market confidence, the
RBA's Monetary Policy Board (MPB) would retain its independence
from government control.
Treasurer Jim Chalmers has indicated in-principle agreement
to all 51 of the recommendationsmade by the review which he set
up last July with an eye to making the RBA "fit for the future".
The review recommended the RBA's current single board be
split into one for monetary policy and one for governance with
an external chair that would oversee operations such as human
resources, finance, risk management and technology.
The MPB would comprise the governor and deputy governor of
the RBA, the Treasury Secretary and six external members with
expertise of open-economy macroeconomics, the financial system,
labour markets and the supply side of the economy.
The review recommended the MPB meet eight times a year,
instead of the current 11 meetings, and an unattributable record
of voting should be published in the post-meeting statement and
minutes should include points of disagreement.
External members would be appointed for a term of five
years, with the possibility of reappointment for up to one year.
Members should be expected to discuss the Board's decisions
in public from time to time, and statements released after
policy meetings should be agreed by them and published in their
name, the review said.
The review said the RBA should better explain its policy
choices through regular press conferences and increasing the
amount of information available about deliberations, strategy,
and its forecasts.
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