Monetary Policy

An important role of the Reserve Bank is conducting monetary policy to achieve the objectives of the Reserve Bank Board. It is the responsibility of the Board to set interest rates in a way that best contribute to the stability of the currency (which means price stability), full employment, and the economic prosperity and welfare of the people of Australia.

To achieve price stability, the Reserve Bank uses a flexible medium-term inflation target, with the goal of keeping inflation between 2 and 3 per cent, on average, over time. The Reserve Bank sets the cash rate to influence economic activity and inflation to achieve this goal.

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