What Is The Policy Target Agreement
The agreement continues the requirement for the reserve bank to maintain annual CPI inflation of between 1 and 3% in the medium term, with the emphasis on keeping future inflation close to the centre of 2%. 3. Article 9 of the 1989 Act obliges the Minister of Finance/Treasurer, in agreement with the Governor of the Reserve Bank, to set political objectives for the Bank to fulfil its primary mission in the conduct of monetary policy, in order to achieve and maintain the stability of the general level of prices. The EEZ must be agreed between the Minister of Finance/Treasurer and the Governor before the governor is appointed or reappointed and is running for the governor`s term. The law requires that the EPZ be presented to Parliament and is therefore a public document. It can be amended or replaced at any time by mutual agreement between the Minister of Finance/Treasurer and the Governor. SYDNEY (Reuters) – The Australian government has decided not to change the framework for the way the Reserve Bank of Australia (RBA) sets monetary policy, as consistency was needed at a time of global uncertainty. The OCR is reviewed seven times a year by the Reserve Bank Board of Directors, which was created in 2013 by Governor Graeme Wheeler and is similar to the Governing Council in terms of form and function.  The committee is composed of the governor of the reserve bank, the two deputy governors and the deputy governor. While the committee takes a consensual approach to deciding monetary policy, the governor of the reserve bank assumes legal responsibility for all monetary policy decisions and retains the right of veto over the committee`s decisions.    In most other developed economies, a committee or board of directors is legally empowered to make monetary policy decisions (see Appendix 1).
In April 2017, former Public Services Commissioner Iain Rennie was appointed by the Ministry of Finance to investigate the reserve bank process for determining political decisions.  In response to unforeseen events, the reserve bank may also adjust monetary policy to an unscheduled stage.