Bullock said on Friday a new Statement on the Conduct of Monetary Policy made it more explicit that the RBA should be aiming to have inflation at 2.5 per cent.

“So we still have some way to go before we meet meet our targets,” she said during a parliamentary hearing in Canberra.

The statement is an agreement between the government and the central bank and guides monetary and central banking policy.

The first update since the Albanese government was elected was released late last year.

The stronger focus on the middle of the target band sparked speculation it could have implications for the policy tightening cycle already under way.

At the board’s first monetary policy meeting of the year, the cash interest rate was left unchanged at 4.35 per cent, as was widely expected in the wake of signs inflation was easing.

The consumer price index fell to 4.1 per cent in the 12 months to December – its lowest level in two years – from 5.4 per cent in the year to September.

Yet the job of getting inflation under control was not complete, Bullock confirmed.

“One thing that has not changed since our previous hearing in 2023 is the challenge presented by high inflation,” she said.

“We all remain acutely aware that the cost of living is rising much faster than it has over recent decades.”

– AAP