An RBA fit for the future

The Reserve Bank of Australia (RBA) is a central piece of Australia’s economic architecture. It contributes to the welfare of Australians by supporting a strong macroeconomy that is resilient to a complex and changing economic environment. An important part of its role is to set monetary policy, which is a critical part of ensuring price stability and full employment. In July 2022 the Treasurer, The Hon Dr Jim Chalmers, announced the Review of the Reserve Bank of Australia and set us an objective of identifying how to make the RBA ‘the world’s best and most effective central bank into the future’. We understand the gravity of the task. This is the first independent and comprehensive review of the central bank since the current approach to monetary policy began in the 1990s. Economic developments over recent years have placed monetary policy arrangements and central bank operations under increased pressure. We are delivering this Review at a time of particular scrutiny on the operations of the RBA. Public focus on monetary policy making is not unusual, both in Australia and overseas. This focus tends to intensify during periods of monetary policy tightening, when difficult decisions need to be made about how best to promote economic welfare across the nation. This Review is not a judgement on the past 6 months. We have looked back over 3 decades. In doing so, our objective is to identify changes that strengthen Australia’s monetary policy framework and the central bank culture to support ongoing public confidence. The Australian public can be confident that Australia’s monetary policy framework is broadly fit for purpose and that the RBA is a high quality, effective institution