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Cash rate target – the key monetary policy decision

We determine monetary policy for the country, which involves setting a target for the cash rate.

Cash rate target

3.60 %

Effective date 8 March 2023

Next update 2.30 pm, 4 April 2023

What is the cash rate?

The cash rate is the interest rate that banks pay to borrow funds from other banks in the money market overnight. It influences all other interest rates, including mortgage and deposit rates.

In technical terms, it is the interest rate on unsecured overnight loans between banks (loans banks use to manage their liquidity). It is our operational target for the implementation of monetary policy.

Learn more about the cash rate target

How do we keep the cash rate close to the target?

Banks can deposit funds with the Reserve Bank overnight and earn a little below the target cash rate. Banks can also borrow funds from the Reserve Bank at a little above the target cash rate. The cash rate trades inside this corridor, and the Reserve Bank can also transact in Australia’s money markets to affect the supply and demand for cash to steer the cash rate close to the target.

Learn more about how the Reserve Bank implements monetary policy

Who makes the decision?

The Reserve Bank Board decides whether to change or maintain the cash rate target. The Board comprises the Governor, Deputy Governor, Secretary to the Australian Treasury and six other members appointed by the Treasurer.

Learn about the role, meetings and members of the Reserve Bank Board

How often does the Reserve Bank Board meet to decide the cash rate?

The Board meets on the first Tuesday of each month, except January.

Board members usually gather at our Sydney Head Office to discuss the latest economic and financial conditions and outlook, and to determine the level of the cash rate that is expected to best achieve the Board’s objectives. The Board also meets in other cities each year.

View our calendar of important releases

How is the cash rate target announced?

We publish the Monetary Policy Decision media release and cash rate target on our website and to the money market at 2.30 pm (Sydney time) after each Board meeting. Many news outlets report this important decision in real time.

How does the decision affect you?

The cash rate has a strong influence over interest rates in the economy, such as lending and deposit rates. In turn, these interest rates influence economic activity, employment and inflation. This affects most people in Australia.

What are our monetary policy objectives?

We work to support the stability of the currency, full employment, and the economic prosperity and welfare of the people of Australia.

About monetary policy

What guides the Reserve Bank Board?

The Board uses an inflation targeting framework agreed with the government to guide its monetary policy decisions. In particular, monetary policy aims to keep consumer price inflation between 2 and 3 per cent, on average, over time.

The Board takes into consideration a wide range of factors, including domestic and international economic and financial conditions, along with the outlook for economic growth and inflation in Australia.

These considerations are published after each Board meeting in a Monetary Policy Decision media release and four times a year in the Statement on Monetary Policy.

Learn more about the inflation target

View the Bank’s Statement on Monetary Policy

Read the Bank’s Monetary Policy Decisions

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