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SYDNEY (Reuters) – Reserve Bank of Australia Governor Philip Lowe said the central bank decided to discontinue its yield target on Tuesday because its effectiveness had declined as the economy improved and interest rate expectations changed.

“Given our forecasts, it is still entirely plausible that the first increase in the cash rate will not be before the maturity of the current target bond – that is, the bond with a maturity date of April 2024,” Lowe said in an opening statement at an online briefing after the RBA’s policy meeting.

“But it is now also plausible that a lift in the cash rate could be appropriate in 2023.”

Lowe said the latest data and forecasts did not warrant a rate rise in 2022.

Earlier, the RBA left its cash rate at a record low of 0.1%, but dropped both a commitment to keeping bond yields low and its projection of no hike in interest rates until 2024.