The Reserve Bank will shake up the way it implements monetary policy from next week, with the launch of a new process for ensuring the Bank’s interest rate decisions feed through effectively to the rates at which commercial banks lend to consumers and businesses.

The Bank said it will change to a new monetary policy implementation framework over a 12-week transition period starting on June 8. This comes after extensive consultation on the details of the framework, which the Bank released for public comment in November. The Bank said it is working closely with bank treasurers and market players to ensure the transition is smooth...