The 1989 Act gave the Reserve Bank operational independence to achieve the objective of price stability. A single decision maker model was introduced making the Governor responsible and singularly accountable for the substance of monetary policy.
The Policy Targets Agreement (PTA) between the Minister of Finance and the Governor set explicit goals for monetary policy to pursue.16 An agreement between a single decision maker and the government provided sufficient flexibility to make the appropriate revisions to the inflation target as we adjusted from high to low inflation.