Our interest rate forward guidance consists of both date and state-contingent legs. The statecontingent leg expresses the anchor of our policy-setting: keeping inflation stably on its sustained path towards levels that are below, but close to, 2% over the medium term.
If our interest rates were higher than in the major countries there would be stronger inflows into Australian dollar assets and this would put upward pressure on our exchange rate. In turn, this would make it harder to make the needed progress on jobs.