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Speaker 1: The new Reserve Bank Governor's made her first big call,

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Speaker 1: Anna Bremens kept the official cash rate at two point

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Speaker 1: two five percent, and she's with us now, Anna, Hello, Hi,

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Speaker 1: Was there any consideration other than holding.

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Speaker 2: At this meeting? There was really full consensus on holding

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Speaker 2: the OCR at this time.

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Speaker 1: How long are you prepared to tolerate inflation being outside

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Speaker 1: the band?

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Speaker 2: Well, we always look to exactly why it's infletion outside

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Speaker 2: of the band. We're not happy with being at three

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Speaker 2: point one percent. We think that it's too high, but

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Speaker 2: we can see that there was some temporary fact. Mainly

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Speaker 2: I'm going to be careful seeing using the word temporary,

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Speaker 2: but we do feel very confident that inflection will fall

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Speaker 2: during twenty twenty six. So that's why we felt comfortable

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Speaker 2: holding the OCR at this time.

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Speaker 1: What would be an indication to you that I'm not

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Speaker 1: saying that you've got it wrong, but you may have

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Speaker 1: got it wrong and that in fact, it is stickier

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Speaker 1: than you think. Like, what's going to be the clue?

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Speaker 2: Well, if we see inflation being higher than we expect

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Speaker 2: overcoming months and later during this year, then again it

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Speaker 2: will depend on exactly what is causing that. But we

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Speaker 2: are we are very focused on bringing inflation back to

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Speaker 2: two percent, the midpoint of our target band, because we

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Speaker 2: need to see low and stable inflation. Again, we will

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Speaker 2: not tolerate inflation outside of the target band. I am well,

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Speaker 2: for how long though, Well, it's always a question of

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Speaker 2: exactly what it is driving inflation, because we base our

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Speaker 2: decisions on where we see inflation heading. Our goal is

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Speaker 2: really to have inflation at the midpoint of the target

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Speaker 2: band or the medium term. So if because there's always

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Speaker 2: there can always be temporary factors that pushes inflation very

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Speaker 2: high or very low. So we always look forward to

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Speaker 2: where inflation is heading, but we do not you know,

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Speaker 2: if it is too high for too long, then of

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Speaker 2: course we'll have to act.

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Speaker 1: Now, I see that you've been quite as saying that

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Speaker 1: you don't want to upset the economic rebound. Is that

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Speaker 1: strictly part of your job.

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Speaker 2: Well, what we're saying is that you know, at this time,

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Speaker 2: we believe that it is important to have a little

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Speaker 2: bit of an accommodative policy, which means that the ocr

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Speaker 2: is a little bit lower than it might be in

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Speaker 2: the longer run. And that is because unless the economy rebounds,

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Speaker 2: we think that inflation may actually fall below the target

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Speaker 2: because if we look at inflation right now, if you

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Speaker 2: look at wage growth, if you look at core inflation,

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Speaker 2: we actually have inflation. Core inflation is firmly within the

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Speaker 2: target band, and that tends to be a better predictor

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Speaker 2: of where inflation is going than headline. So in that sense,

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Speaker 2: you know, we are comfortable that inflation will be a

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Speaker 2: target in the medium term.

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Speaker 1: Are you worried at all that households are still too

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Speaker 1: cautious about spending what money they may have.

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Speaker 2: I mean, I understand it, because you know, households have

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Speaker 2: some very tough years behind them. We've had weak growth

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Speaker 2: we've had and we still have high unemployment. The houses

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Speaker 2: being cautious, I do understand that, but we and we

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Speaker 2: do understand that households we need to see some better

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Speaker 2: purchasing power going forward and the stronger labor market. But

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Speaker 2: that if you look at the economic data right now,

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Speaker 2: we're getting some positive signals that the economy is starting

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Speaker 2: to grow, but we are saying also that we're at

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Speaker 2: the early stages of the recovery.

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Speaker 1: Are you worried about the I mean recently, which maybe

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Speaker 1: slightly before your tenure, but late last year the major

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Speaker 1: bank started to raise the retail rates. Were you worried

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Speaker 1: about that at all.

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Speaker 2: We did discuss it because you know, we've seen that

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Speaker 2: mortgage rates have been going up and that is likely

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Speaker 2: affecting households and how they see the outlook. Were also

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Speaker 2: seen that house prices have been not growing quite as

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Speaker 2: we expected, so we do take that into consideration and

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Speaker 2: we're seeing that, you know, compared to markets. We're seeing

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Speaker 2: the ocr being on hold for some time, and then

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Speaker 2: we expect when the economy is getting stronger and we're

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Speaker 2: expecting to see a bit more inflation or pressures data

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Speaker 2: out and we will start tightening. But right now we

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Speaker 2: are on.

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Speaker 1: Hold tightening from December.

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Speaker 2: Well, you know, we don't say no exactly when because

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Speaker 2: it will always we will adjust if we see any

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Speaker 2: changes in the outlook. But we're saying that there is

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Speaker 2: a probability towards the end of the year of a

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Speaker 2: rate hike.

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Speaker 1: That's that's correct, and it's very good to talk to you.

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Speaker 1: Thank you for your time. It's and a brim and

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Speaker 1: the Reserve Bank governor the new one. For more from

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