TREE NEWS update: Reserve Bank of Australia Governor Michele Bullock said the central bank does not target the exchange rate in any way, reaffirming the RBA’s policy framework. The remark addresses how the central bank treats the Australian dollar, which it allows to float freely rather than managing toward a specific level. No further details on policy or timing were provided.
RBA’s Bullock: We Do Not Target the Exchange Rate at All
Bullock's restatement is a reminder that the RBA's reaction function runs through inflation and the domestic economy, not the currency, so Australian dollar moves are left to absorb external shocks rather than prompt a policy response. For markets that read central-bank language for implicit currency guardrails, the message is that no such line exists. The open question is whether that framing holds if exchange-rate swings start feeding meaningfully into imported inflation or financial conditions, which the remark does not address.
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