Treasurer Josh Frydenberg says he will not lower the inflation target which sits between two and three per cent.

The target has been unchanged since the 1990s and the Treasurer insists that it will remain.

In line with expectations, the Reserve Bank has held interest rates at the historic low of 0.75 per cent.

Mr Frydenberg tells Ross Greenwood Australia is not alone in failing to meet its inflation targets.

“We decided that at this time of global uncertainty we needed continuity and certainty in our monetary policy framework.”

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HSBC chief economist Paul Bloxham tells Ross, on average, the RBA has met the inflation target.

“It’s worked very well, I’d say it’s the key reason why Australia’s had 28 years of continuous GDP growth.

“We’ve got a challenge at the moment, that inflation is abit too low but that doesn’t mean that you should necessarily change the target.”