Australia's central bank committed to inflation-targeting policy

[SYDNEY] Australia's central bank is committed to an inflation targeting monetary policy framework, the head of the Reserve Bank of Australia said on Tuesday.

Speaking on a broad range of topics to the Trans-Tasman Business Circle in Sydney, Glenn Stevens said the framework is flexible and does not require any "knee jerk" reaction from the central bank when inflation does move outside of its target range.

Surprisingly low inflation prompted the RBA to cut the cash rate to a record low 1.75 per cent earlier this month and has investors betting on at least another easing this year.

REUTERS