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Treasurer Jim Chalmers today presented the terms of reference for the Federal Government’s review of the Reserve Bank of Australia (RBA).

He said the review was necessary as the economy faced “very difficult” medium- and long-term challenges.

“This is our opportunity to ensure that the monetary policy framework is the best possible to make the right choices in the interests of the Australian people and their economy.

“This review will examine the RBA’s objectives, mandate, interplay between monetary, fiscal and macro-certificate policy, its governance, culture, operations and more.”

Chalmers insisted the government was being open-minded in reviewing the RBA.

“I don’t want it to be an exercise in pot shots or guesswork, I don’t want it to be exclusively focused on an exercise in shifting blame backwards.

“I really want this to be about how we will have the best central bank in the world in the future.”

Despite this, the review will look at whether the central bank got its inflation forecast wrong.

Chalmers said a panel of three experts – from Australia and overseas – independent of the Treasury and the RBA will lead the review.

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