RBA Gov Bullock: Risks are skewed toward inflation and policy is responding accordingly

Good morning, Chair and members of the Committee. My colleagues and I are pleased to be here today to answer your questions. These hearings are an important part of the accountability process for the Reserve Bank. As you know, our mission is to promote the economic prosperity and welfare of the Australian people, now and into the future. We do this by conducting monetary policy with the aim of maintaining low and stable inflation and full employment, and we also support the stability of the financial system. But our responsibilities go beyond this – we work to support a reliable, efficient and competitive payments system, deliver efficient and effective banking services to Australian government agencies and provide secure and reliable banknotes. Since we last met with the Committee, the Monetary Policy Board judged that it was appropriate to tighten monetary policy to help to return inflation to target. I will start with some background to this decision and the outlook for the Australian economy. I’ll then make some remarks on the payments system and cash distribution. And I’ll finish off with an update on our progress towards achieving the objectives of the RBA Review. RBA Governor Bullock said the board will stay data-dependent as inflation risks remain persistent, the labour market is still tight, capacity constraints are being assessed, and global conditions could shift quickly.