Kent, Assistant Governor of the Reserve Bank of Australia, believes that the central bank will be better equipped to handle the next crisis.

Chris Kent, Assistant Governor of the Reserve Bank of Australia, has stated that after reviewing alternative monetary policy tools, the central bank will be better equipped to deal with the next crisis. The RBA released a framework for additional monetary policy tools in a low-interest rate environment on Monday. Kent, speaking in Sydney about this framework, said, "The cash rate target remains our primary tool of choice, additional tools can play an important role in exceptional times and provide some additional support, but they are more complex and carry higher risks." During the COVID-19 pandemic, the Reserve Bank of Australia lowered the cash rate to 0.1% and implemented yield targets and bond purchase programs. Former Governor Philip Lowe also provided forward guidance, but this guidance posed challenges when inflation surged after the pandemic. Kent emphasized that when interest rates are already low, the Monetary Policy Committee's tolerance for inflation below the 2-3% target range may decrease. He said, "In these circumstances, the committee may consider pre-emptively lowering the cash rate target to respond earlier and more decisively to inflationary shocks."