Major changes in store for the Reserve Bank

RBA Governor Philip Lowe speaks to media following the RBA Review announcement Source: AAP / JAMES BRICKWOOD

Australia's central bank is set for the biggest overhaul in decades, with a much anticipated review recommending major changes. It's one of the most significant to establish a separate board solely focused on monetary policy - like setting interest rates.

Learning from the first independent review of the bank since the 1980s.

Recommending the establishment of a separate Monetary Policy Board focused on setting interest rates.

Including: the Governor, Deputy Governor, Treasury Secretary and six external members who'd serve five year terms.

To meet eight times a year instead of eleven, allowing more time to consider advice and for households to absorb any rate hikes.

The Governor is then required to hold a press conference after each meeting.

The 300 hundred page report makes 51 recommendations, all agreed to by the government.

Another change, to 'clarify its statutory monetary policy objectives' by giving equal weight to stability of price and full employment.

The Treasurer has also agreed to remove the Government's veto power over RBA decisions.

These proposed changes will require legislation, which the government intends to have in place by July next year.

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