The general starting point is to ask: what is in the public interest? The medium-term inflation target is pursued as way of achieving our broad goals as set out in legislation.
This legislation, which was passed in 1959, states that the Reserve Bank Board must exercise its powers in a way that best contributes to: (i) the stability of the currency of Australia; (ii) the maintenance of full employment in Australia; and (iii) the economic prosperity and welfare of the people of Australia.