Mumbai, March 18 -- Sarah Hunter, Assistant Governor (Economic) of the Reserve Bank of Australia or RBA stated that given the lags in monetary policy transmission, we always have to forecast how we think the economy will evolve, and set policy now so that we expect to achieve our mandate once any policy change has had time to have its effect. In practice, policy decisions also take account of uncertainties about the outlook. We put significant effort into identifying and understanding the risks around the baseline forecast, and the Board explicitly considers such risks in its decision-making, she noted.
In recent years many central banks have described their policy setting as 'data dependent'. Rather than meaning that policy responds mecha...