THE SQUIZ

Some major changes will come into effect for the Reserve Bank of Australia (RBA) in February next year. After 51 recommendations for improvement were outlined by an independent review in March, Governor Philip Lowe responded yesterday saying from 2024, the bank’s board will meet 8 times a year, down from it’s current schedule of 11 meetings. And crucially, each meeting will run longer to give members more time to discuss the key information before making monetary policy decisions. Lowe hasn’t welcomed all the criticism levelled at the RBA in recent months, but said he understands change is needed. “The world we face is increasingly complex, and it is right to re-examine how we make and communicate monetary policy decisions and how the RBA is managed,” he said.

BUT WHAT AM I MEANT TO DO ON THE FIRST TUESDAY OF EACH MONTH? 

Take up knitting? You’ll work it out… How it will work going forward is the board’s meetings will start on Monday afternoons, and continue into Tuesday. Interest rate decisions – aka the major announcement out of those meetings – will still be shared publicly at 2.30pm, but the post-meeting statements will now come from the whole board, before the governor holds a press conference. Currently, the governor issues the statement and doesn’t always do a presser. The idea is – given we’re now acutely aware how critical interest rates are – more experts own the decision and communicate it clearly to us economic slaves… Also new: the board’s plan to work with Treasury on 5-yearly “open and transparent” reviews of the monetary policy framework to ensure the bank adapts more quickly to global changes as they come.

SO ONWARDS AND UPWARDS?

Sure, but maybe not for Lowe… Yesterday, Treasurer Jim Chalmers foreshadowed a decision that’s yet to be made on Lowe’s future. His term as governor ends on 17 September and Chalmers yesterday said a decision is yet to be made. Lowe could be given an extension, but given the past 14 months of increases after his incorrect call in 2021 that rates wouldn’t go up until 2024, there’s heaps of speculation that he’ll be turfed. For his part, Lowe says he wants to keep his job. In terms of replacements, there are 3 major contenders: Deputy Governor Michele Bullock, Finance Department Secretary Jenny Wilkinson, and Treasury Secretary Stephen Kennedy. But it ain’t over ‘til it’s over for Lowe – and he’ll have a bit of time to sweet talk Chalmers during a visit to India next week for a big finance ministers/central bankers conference.