The Reserve Bank governor Glenn Stevens does not believe the central bank would have to jack up interest rates if a price on carbon was re-introduced.
Mr Stevens told the House of Representatives economics committee that the removal of the carbon tax by the Abbott government will temporarily lower the rate of inflation over the coming year.
He told the twice-yearly hearing in Brisbane that the introduction of the impost in 2012 had no implications for interest rates.
He said an identified policy change, like when the GST was introduced in 2000, clearly had a one-time price effect and the RBA could not offset that by raising interest rates.
"And nor should we," he said.
Asked if a carbon tax was reintroduced whether it would have an impact in interest rates, Mr Stevens said: "I don't think we'd be jerking around the interest rate aggressively in response to that unless you thought it was triggering widespread inflation in the economy."
The federal Labor opposition has said it would pursue an emissions trading scheme if it is returned to government.
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