RBA Vice Chairman Howser: Some people's confidence in the ability to implement policies has declined, especially in terms of inflation. Monetary policy has lagging effects, and pain often precedes results. It will enhance our ability to clearly state our positions, including when circumstances change. If people don't trust the central bank, the central bank will have to raise interest rates sharply to keep inflation down. Policy responses to curb inflation can be smaller and less costly if the public trusts the central bank's strategy. The central bank's credibility is under pressure.

RBA Vice Chairman Howser: Some people's confidence in the ability to implement policies has declined, especially in terms of inflation. Monetary policy has lagging effects, and pain often precedes results. It will enhance our ability to clearly state our positions, including when circumstances change. If people don't trust the central bank, the central bank will have to raise interest rates sharply to keep inflation down. Policy responses to curb inflation can be smaller and less costly if the public trusts the central bank's strategy. The central bank's credibility is under pressure.