The House of Representatives Standing Committee on Economics will hold a public hearing with the Governor of the Reserve Bank of Australia (RBA), Dr Philip Lowe, on Friday, 14 August 2020 via videoconference. The RBA last appeared before the committee in February 2020.
At its meeting on 4 August, the RBA Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Government bonds of 25 basis points.
Commenting on the decision, the RBA Governor said that ‘This accommodative approach will be maintained as long as it is required. The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2-3 per cent target band.’
The RBA Governor added that ‘The Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now underway in most of Australia. This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy.’
Committee Chair, Mr Tim Wilson MP, said ‘the committee will be scrutinising the RBA’s measures in response to the COVID-19 pandemic. We are interested in learning more about the RBA’s plans to support a strong recovery for the Australian economy.’
‘There’s never been a more lively time to discuss monetary policy, with reckless proposals for Modern Monetary Theory floated in the media. This hearing will provide a good opportunity for the RBA to outline the shortcomings of such proposals.’ Mr Wilson said.