It is worth emphasising that ever since the adoption of the current framework, the Reserve Bank has been a proponent of what is known as flexible inflation targeting. We have not seen our job as always keeping inflation tightly in a narrow range. We have not been what some have called ‘inflation nutters’.
We have had a more balanced perspective, recognising that some degree of variability in inflation from year to year is both inevitable and appropriate. In particular, a flexible medium-term target is the best way for us to deliver low and stable inflation in a way that contributes to our other broad responsibilities, including employment and preserving financial stability.