RBA governor dispels view board ‘does nothing’

The governor of the Reserve Bank of Australia has come to the defence of the institution’s board, dispelling the idea that when it meets, participants “do nothing”.

“I sometimes read that the board’s job has become very easy: we just meet and do nothing,” Philip Lowe said today (May 1).

This is not the case, the governor argued. “They [the board] will assure you that each month when we meet, we diligently assess the pulse of the Australian economy,” Lowe went on to say.

His remarks were delivered the same day as board’s latest decision to leave rates on hold at 1.5%. The policy rate has been at this level since August 2016, or 21 months, the longest rates have ever remained unchanged.

Despite the inaction, Lowe said the board believed the Australian economy to be “stronger” than it was a year ago, with business conditions at their highest level for many years.

And while faster progress would be welcomed, the governor said it was “encouraging” things were moving “in the right direction” and would likely continue to do so.

“If this is how things turn out, it is reasonable to expect that the next move in interest rates will be up,” Lowe said.