BDO comment on RBA restructure

Economist and BDO partner, Ally Flint, commented on today’s announcement by RBA governor, Philip Lowe, to restructure the RBA meeting cadence.

Her comment:

RBA governor Philip Lowe has today revealed a slimmed down annual schedule of eight board meetings, effective from February 2024, with the addition of post-meeting press conferences. Four of the meetings will be on the first Tuesday of February, May, August and November, with the quarterly statement on monetary policy released at the same time. The remaining four meetings will be held midway between these meetings.

It is expected that the less frequent, but longer meetings will facilitate deeper discussions on monetary policy strategy, alternative policy options and risks, as well as delve into more detailed issues surrounding the economy. The RBA will also continue to focus on the implications of climate change for the economy, inflation and the financial system. Further changes will see the RBA working with Treasury to undertake 5-yearly comprehensive reviews of the central bank’s monetary policy framework to ensure it keeps adapting to any changes in the global economy. BDO expects no near-term implications of these changes, however it is hoped that longer deliberation related to economic issues will lead to better economic outcomes.

Treasurer Jim Chalmers is expected to announce Dr Lowe’s successor imminently, with Deputy governor Michele Bullock , Treasury secretary Stephen Kennedy and Finance Department Jenny Wilkinson as likely contenders for the role.

Dr Lowe’s speech reiterated the RBA’s priority of ensuring that the period of high inflation is temporary but has also noted that it “remains to be determined” whether rates will rise again, with CPI, labour market and retail data the key to decision making, as there are some factors pushing inflation lower that balance potential stickiness elsewhere, which will be assessed in the coming months.

ENDS
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