Our judgement is that it has been a successful monetary policy response, which has helped keep funding costs low and reinforced our forward guidance about the cash rate. At the time the target was introduced, the 3-year government bond had a maturity date in early 2023.
At that time, the Board recognised that the pandemic would require an extended period of very accommodative monetary policy. Reflecting this, the Board's view was that the probability was extremely low that the conditions for an increase in the cash rate would be met within 3 years. Adopting a 3-year yield target reinforced that message.