RBA’s Lowe defends inflation target’s effectiveness
Alternative frameworks would be difficult to implement and harder to explain – Australian governor
Reserve Bank of Australia governor Philip Lowe has rejected modifying the central bank’s inflation target.
Lowe defended the regime even though Australian inflation has fallen below the RBA’s target level of 2–3%. The RBA’s last inflation figures show inflation falling year-on-year to 1.3% for the first quarter of the year.
In a speech in Sydney on July 25, Lowe argued: “The evidence does not support the idea that a change to our inflation target would deliver better economic outcomes.” He
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