What are the Objectives of Reserve Bank Monetary Policy?

1 ANSWERS

1. Guest6237
   

   The Reserve Bank Board sets interest rates so as to achieve the objectives set out in the Reserve Bank Act 1959
   • the stability of the currency of Australia;
   • the maintenance of full employment in Australia; and
   • the economic prosperity and welfare of the people of Australia.
   Since 1993, these objectives have found practical expression in a target for consumer price inflation, of 2–3 per cent per annum. Monetary policy aims to achieve this over the medium term so as to encourage strong and sustainable growth in the economy. Controlling inflation preserves the value of money. In the long run, this is the principal way in which monetary policy can help to form a sound basis for long-term growth in the economy.

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