“As times change,we too need to change,” he said in a speech at the Australian Conference of Economists in Brisbane.
“The world we face is increasingly complex,and it is right to re-examine how we make and communicate monetary policy decisions,and how the RBA is managed.”
Lowe also said there may not be a need for future interest rate rises after the bank lifted the official cash rate from 0.1 per cent to 4.1 per cent in just over a year.
“It remains to be determined whether monetary policy has more work to do,” he said on Wednesday.
Lowe said the board will examine new figures on inflation,the jobs market,household spending and the global economy to help inform its next decision in August.
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Some data already shows the economy is slowly responding to the 12 rate rises.
ANZ analysis showed households have pulled back on spending as the sales season ended.
Total spending for the start of July is down 11.4 per cent compared to the same period last year,a faster decline than the 9.5 per cent fall over the whole of June compared to June 2022.
While savings buffers and an increase in real incomes were protecting some households from financial stress,the research found confidence among households with a mortgage was at an all-time low.
The central bank governor,whose term expires in September,hasfaced heavy criticism from the public and all sides of politics over his communication and handling of monetary policy after saying as late as November 2021 it was unlikely the bank would raise interest rates until 2024,before starting to raise rates in May 2022.
Chalmers said he respects Lowe and has been consulting widely aboutwho should be governor of the RBA going forward.
Lowe said he would be happy to stay in the job,noting the treasurer has said he would make an announcement before the end of the month.
“If I was asked to continue in the role,I’d be honoured to do that,” he said. “If I’m not asked to continue in the role,I will do my best to support my successor.”
Lowe pointed out in his speech that the review found the central bank had dedicated,highly skilled staff,and that its inflation target of 2-3 per cent was fit for purpose.
The Reserve Bank has agreed to adopt 10 changes,including lengthening board meetings and allowing board members to attend internal staff meetings.
Lowe said the new post-meeting media conference will provide a “timely opportunity” to answer questions and explain the board’s decision.
“This is a significant package of reform that will contribute to better decision-making and communication,” he said.
But the work on other major changes,such as publishing how the board voted on rate decisions,has been delayed until the second bank board is up and running,which requires legislative change. Lowe said further recommendations were still being worked through.
Acting shadow treasurer Jane Hume welcomed the RBA governor’s plans to implement the review changes but said the Coalition would scrutinise the government’s handling of recommendations,including how it selects the next governor.
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“As Angus Taylor has said,Australia must have an independent,credible and capable Reserve Bank,” she said.
“With regards to the appointment of the RBA governor,we want the government to follow the process laid out in the RBA review.
“It’s important whoever is doing the job has the right qualifications,experience and knowledge,and that they are independent from government.”