RBA 'is still in control of monetary policies'

Bosses at the Reserve Bank of Australia (RBA) have insisted that the organisation is still calling the shots when it comes to financial policy in the country.

There have been claims that the nation's major banks have become a law unto themselves and are turning a blind eye to interest rates set by the RBA.

Indeed, when the body opted not to lower rates last month, the likes of Westpac, Commonwealth Bank, National Australia Bank and ANZ quickly hiked the rates attached to their home loans.

Despite this, deputy governor of the RBA Philip Lowe has asserted that such moves have not undermined the RBA's authority.

He also stated that the high value of the Aussie dollar is a positive thing, but the RBA has enough flexibility to change things if levels of unemployment start to rise.

"The key question for us is, if the banks move independently of the Reserve Bank, whether that undermines the transmission mechanism of monetary policy," he was quoted by the Australian Associated Press as saying, before adding that the answer to this question would be "no".

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