RBA’s Kent - large exchange-rate movement may be big shock to economy

Reserve Bank of Australia’s (RBA) Kent was on the wires calling large exchange rate movement could result in a big shock to the economy.

Key quotes

Inflation low, likely to remain so for some time

International factors on local inflation typically persistent

Monetary policy stance may alter if outlook change significant

Outlook may change if view on how econ evolves revised

But link between forecasts, policy not mechanical