Reserve Bank of Australia Assistant Governor: Will be better able to respond to the next crisis

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Golden Finance reported that on June 29, Kent, Assistant Governor of the Reserve Bank of Australia, said that after a review of alternative monetary policy tools, the institution will be better able to respond to the next risks it faces. He said, “The cash rate target remains our main and preferred tool, and in special times, other tools can play an important role and provide additional support, but they are more complex and involve greater risks.” Kent also mentioned the newly released supplementary monetary policy tool framework for a low-interest-rate environment by the Monetary Policy Committee. He emphasized that when interest rates are already low, the Committee’s tolerance for inflation falling below the 2% to 3% target may decrease. He said that in this situation, the central bank may consider responding to deflationary shocks earlier and more decisively by lowering the cash rate target in advance.
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