What is the Reserve Bank of Australia's inflation target range?

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The Reserve Bank of Australia's (RBA) inflation target range is set at 2-3%. This target is significant because it reflects the RBA’s goal of maintaining price stability in the economy, which is crucial for sustainable economic growth. The targeted range aims to balance the need for low inflation with the realities of economic fluctuations and pressures.

By aiming for an inflation rate within this range, the RBA seeks to ensure that inflation remains low enough to protect the purchasing power of consumers while being high enough to not stifle economic growth. This target range is part of the RBA’s broader monetary policy framework, which includes managing interest rates and other monetary tools to influence economic activity.

In contrast, the other ranges provided are outside the RBA’s established target, indicating either a low level of inflation that may suggest economic stagnation or a higher level that could reflect overheating in the economy. The 2-3% target has proven to be effective in guiding monetary policy decisions, helping to anchor inflation expectations and contributing to overall economic stability.

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