“Not because we’ve asked for some kind of performance review of the governor, but because we want to learn from best practice and give the RBA the best structures and institutional settings we can,” he said.
Chalmers rejected the assertion that Lowe’s days as central bank chief are numbered.
“That’s not what I’m trying to say,” he said. “We do have this really important review being handed to me in March. After that it would be strange, I think, not to factor in some of those conclusions in whatever we decide about the role of the governor.”
The RBA on Thursday released its 84-page response to questions addressing issues ranging from monetary policy decisions to communication and governance. Lowe has publicly claimed that a flexible inflation targeting framework remains appropriate for the bank.
The RBA has faced increasing criticism in recent years, ranging from the RBA failing to meet its 2-3% inflation target prior to the pandemic to then sticking with excessively easy policy as Covid receded.The central bank acknowledged in its submission that the board has been subject to a number of criticisms, including a “disorderly cessation” of its pandemic-era yield-target policy.
RBA board includes only one economist among 6 independent directors. Criticism directed towards RBA board indicated that this makes the board not enough qualified to push back against bank policy recommendations.
The central bank of Australia this year raised interest rates by 3 percentage points from a record low 0.1% in May in an attempt to control inflation rates. Making this its sharpest annual policy tightening since 1989.