A historic change is on its way to Australian banknotes as a final farewell to ousted Reserve Bank of Australia governor Philip Lowe.
Dr Lowe, who was RBA governor from 2016, was unceremoniously ousted in July when the government decided not to renew his appointment. Michele Bullock, the first female governor of the RBA, officially replaced Dr Lowe on Monday.
Now, her signature will be printed on Aussie banknotes to commemorate the change.
Since 1989, all Australian banknotes have featured the signatures of the RBA governor and treasury secretary at the time that they were printed.
That means all new banknotes feature Ms Bullock’s signature, rather than Dr Lowe’s.
But it’s unlikely the change will be noticeable right away.
The RBA holds a stock of banknotes that are released into circulation based on demand. Those notes still feature Dr Lowe’s signature, meaning ones with Ms Bullock’s will be released into the economy slowly.
Ms Bullock was hand-picked by the government as Dr Lowe’s successor, having worked for the RBA since 1985.
She will be leading an RBA that is very different in structure, after an independent review found a need for increased accountability at the bank.
Under the changes, which were signed off on by Dr Lowe, the RBA will have two boards — one responsible for running the day-to-day operations of the bank, and another to set interest rates.
But it’s unlikely Ms Bullocks approach to interest rates will differ wildly from Dr Lowe’s.
Previously, she has said interest rates are the RBA’s only tool to tackle inflation, which is falling but remains stubbornly higher than targets.
“It is our only tool; it works through a number of different mechanisms,’ she said.
“But, really, in bringing down inflation, that’s the only tool we have.”
“As interest rates rise, people are incentivised to save more rather than consume, and that reduces demand,” she explained.
“It also keeps the exchange rate a bit higher, which means that imported inflation is lower.”
Get in touch — chloe.whelan@news.com.au