Why RBA Meeting Dates Are Near-Rigid

By Sophia Rodrigues

Central banks announce monetary policy meeting dates up to two years in advance. For example, as of today, the Reserve Bank of Australia's meeting dates through December 2027 have been announced.

These dates are not 100% rigid, but neither are they flexible. Central banks don't like to shift them because institutional credibility is important. Financial market contracts are based on these meeting dates.

Central banks operate monetary policy via financial markets, so markets need to trust that a central bank will meet the published schedule. That said, central banks do shift dates when they see a pressing reason to do so (more like emergency).

The last time the RBA held an unscheduled meeting was on March 19, 2020, when it announced a package of measures during the Covid era. The one before was in July 1997 (I may be wrong here).

I am impressed that the RBA didn’t do any out-of-turn meetings during the GFC. I wasn't following them closely back then, but it really speaks to how well it managed monetary policy under pressure.

Why this post? Because there is now chatter of an RBA cash rate hike as soon as the September meeting, and the meeting is one day before the next monthly CPI release.

Should the RBA shift the meeting date so it has the latest inflation release to debate? Would the RBA shift the date?

I think the answer is No. Because, in my view, credibility matters. The RBA will take monetary policy decision based on what it knows and the outlook. Having the inflation release would be ideal, but it is not a reason to change the date. Certainly not...when the following meeting in November is just five weeks away.