By James Glynn
SYDNEY--A long-awaited review of the Reserve Bank of Australia's operations and culture will recommend the creation of a dual board structure, with one dealing with interest rate decisions, and the other the governance of the central bank.
Treasurer Jim Chalmers is expected to announce the review early Thursday, with RBA Governor Philip Lowe set to respond in a press conference starting at 0200 GMT.
A dual board structure will bring the RBA in line with a number of other central banks that have adopted the model to better focus on the economy, and invite in a greater level of expertise.
The RBA's current nine-member board includes the Governor, the RBA's Deputy Governor, the Secretary of the Treasury, with the six remaining members drawn from business and academia.
"The review is all about ensuring Australia's central bank and monetary policy arrangements are as strong and effective as they can be into the future," Mr. Chalmers said in a statement Wednesday.
The review, which was led by three independent policy experts, is also expected to affirm the government's commitment to the independence of the RBA, and support for the current 2% to 3% inflation-target.
The review of the RBA is the most comprehensive reshaping of the central bank since the 1990s and follows a period of sustained criticism of key figures at the central bank as interest rates were raised at a record pace.
The RBA has raised interest rates by a record 350 basis points over ten consecutive policy meetings since May last year, only announcing a pause this month to assess the impact of the increases.
The RBA also indicated this week that the pause was to review the impact of the tighter policy settings, and did not rule out further increases.
Anger at the rapid rise in interest rates has led to calls for Mr. Lowe to resign, demands that he has so far ignored. His term as Governor ends in mid-September, with some economists speculating his replacement might come from an overseas central bank.
Australia's commodity-rich economy is battling the biggest surge in inflation pressures in over 30 years, with recent data suggesting that the rise in living costs may have peaked in the final months of last year.
The review titled "An RBA fit for the future" will make 51 specific recommendations for change under 14 broader headings.
Some of the proposed changes will fall to the RBA to implement given it operates monetary policy independently, Mr. Chalmers said.
However, other recommendations will require legislative change, with Mr. Chalmers hoping for bipartisan support in parliament from the opposition Liberal Party to hasten implementation of the changes.
Mr. Chalmers said he has already discussed the review with opposition treasury spokesperson Angus Taylor, who was provided with the full report earlier this week in advance of its release.
The review panel received more than 1,500 contributions through interviews and submissions, focus groups and survey responses, and consulted with 137 global and domestic experts, including current and former RBA board and staff members, parliamentarians and academics.
Mr. Chalmers is also expected to announce on Thursday the appointment of two new RBA board members that will replace the outgoing Wendy Craik and Mark Barnaba, both of which have indicated they would not seek reappointment.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
04-19-23 0844ET
