RBA SHAKE-UP: Central bank now using a Powerball machine to determine interest rates

NUMBERS GAME: A scathing review of the Reserve Bank has led to a controversial new way for the institution to determine the nation’s cash rate.

The RBA has announced that from next month, it will use a Powerball machine to set interest rates, sparking both intrigue and concern in the financial world.

“We’ve tried meticulous research and analysis by economists, but it hasn’t worked,” says RBA Governor Philip Lowe.

“We think it’s time to try something a little different in a bid to give borrowers more clarity.”

Mr Lowe has been widely criticised after saying in 2021 that interest rates might not rise until 2024. Since then the RBA has lifted rates several times.

As part of the changes announced today, the RBA says the setting of future interest rates will be a televised event, in a bid for greater transparency.

“Four numbered balls will be randomly plucked by the Powerball machine and an average of those four numbers will be taken to determine the cash rate.” says Philip Lowe.

Critics say the changes are reckless and are warning of potential financial chaos. But Mr Lowe is dismissing those fears.

“The unpredictability of the Powerball machine is no worse than the unpredictable nature of our economy at the moment,” he says.