Why Australia Targets 2–3% Inflation?

What’s behind Australia’s 2–3% inflation target—and why does it matter? In this episode, we break down the Reserve Bank of Australia's inflation target, how it's measured using the Consumer Price Index (CPI), and why keeping inflation within this range helps ensure price stability and full employment. We explore how the RBA uses monetary policy, like adjusting the cash rate, to respond to inflationary pressures and manage the economy. You’ll also learn why this specific target range was chosen and the risks of aiming too high or too low. A clear and practical guide to understanding one of the most important tools in Australia’s economic policy.

Source: https://www.rba.gov.au/education/resources/explainers/