These changes reflected a recognition of the Bank’s need for greater freedom of action in its day-to-day operations and an awareness of the need for sufficient policy instruments in conducting monetary policy. Today, the Reserve Bank virtually performs the full range of functions and duties that are customarily carried out by central banks.
Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. However, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively. Given continued high structural unemployment and low potential output growth in the euro area, the ongoing cyclical recovery should be supported by effective structural policies.