Traditionally, a new treasurer formalizes an agreement between themselves and the governor regarding the conduct of monetary policy.
Monetary policy circles criticized the latest deal, signed by then-treasurer Scott Morrison, for including “financial stability” as one of its core goals. Some monetary policy experts believe that this term meant the bank was slower than it should have been in cutting interest rates between 2016 and 2019.
Chalmers said the current agreement and the bank’s overall functioning would remain unchanged until the review was completed.
“It makes sense for us not to prejudge the results of the review and not to substantially change our statement of expectations regarding the Reserve Bank until we see the outcome of that review,” he said.