It was a bad week for the Reserve Bank. Former central banker Peter
Jonson says the RBA has a mindset problem. “Someone once remarked that
sunlight is a great steriliser. The Reserve Bank is currently in the
spotlight in part because it is not committed to allowing the
antiseptic qualities of sunlight into its dimly illuminated boardroom.

“In
particular, it does not give immediate infomation about why it decides
to leave interest rates unchanged, not even in April 2005 when its
earlier published views had led most commentators to expect a rate hike.

“Worse
still, a ‘well connected’ private agency was telling people in the
financial market on Friday and Monday that it was certain that there
would be no rate hike after Tuesday’s meeting of the Board. A lucky
guess? This hypothesis strains credulity.”

Read more here .

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Peter Fray
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