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RBA Glossary definition for interest rate
interest rate – The term used to describe the cost of borrowing money or the return to the owner of the funds which are invested or lent out. It is usually expressed as a percent per annum of the amount of money borrowed, lent or invested.
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The Rise in Household Liquidity
10 Nov 2021
RDP
2021-10
Specifically, disinflation and falling real interest rates have increased housing prices and housing deposits, and have also made it easier to amortise existing debt. ... The relevant interest rate is derived from RBA statistical table ‘F5 Indicator
https://www.rba.gov.au/publications/rdp/2021/2021-10/full.html
The Rise in Household Liquidity and Falling Interest Rates
10 Nov 2021
RDP
2021-10
This is consistent with lower interest rates increasing the rate of debt amortisation and helping those with existing debt to build liquidity buffers. ... rate. However, the first borrower took out the loan when interest rates were higher than the other
https://www.rba.gov.au/publications/rdp/2021/2021-10/the-rise-in-household-liquidity-and-falling-interest-rates.html
The Rise in Household Liquidity
10 Nov 2021
RDP
2021-10
consumption, debt, financial stability, households, housing, income and wealth, interest rates, money. ... schedule. The process of building wealth and liquidity through debt amortisation has been supported by the trend decline in interest rates and
https://www.rba.gov.au/publications/rdp/2021/2021-10.html
Appendix A: Derivation of the Loan Amortisation Formulae
10 Nov 2021
RDP
2021-10
A formula for the principal amount outstanding in any given period can be derived given a scheduled payment ( m ) and contracted nominal interest rate (R = (1 i)). ... 0. t. 1. R. k. Given a geometric progression for the sum of the interest rate terms,
https://www.rba.gov.au/publications/rdp/2021/2021-10/appendix-a.html
Appendix B: Cross-country Evidence on Liquidity Buffers
10 Nov 2021
RDP
2021-10
Long-term interest rates are based on government bonds maturing in ten years. ... Figure B1: Response of Liquidity Buffer to a 1 Percentage Point Interest Rate Cut.
https://www.rba.gov.au/publications/rdp/2021/2021-10/appendix-b.html
Appendix D: Household Liquidity, Precautionary Saving and Borrowing Constraints
10 Nov 2021
RDP
2021-10
The model is partial equilibrium in nature in that it takes income, housing prices and interest rates as given. ... In effect, when there is uncertainty about future income (e.g. because of increases in interest rates or falls in income), an
https://www.rba.gov.au/publications/rdp/2021/2021-10/appendix-d.html
The Rise in Household Liquidity
10 Nov 2021
RDP
2021-10
Research Discussion Paper – RDP 2021-10 The Rise in Household Liquidity. Gianni La Cava and Lydia Wang. November 2021. 1.71. MB. We would like to thank Alex Ballantyne, Anthony Brassil, James Graham, Jonathan Kearns, Amanda Martz,
https://www.rba.gov.au/publications/rdp/2021/2021-10/sections.html
Read me file
10 Nov 2021
RDP
2021-10
Functions: Produces regression results for Table 3: The Effect of Interest Rates on Household-level Liquidity. ... Cross-country data. Do file: Cross-Country Evidence.do. Functions: Produces Figure B1: Response of Liquidity Buffer to a 1 Percentage Point
https://www.rba.gov.au/publications/rdp/2021/2021-10/read-me.html
Conclusion
10 Nov 2021
RDP
2021-10
A little recognised ‘side effect’ of rising housing prices and debt has been the increased rate of housing-related saving through higher mortgage principal payments. ... This increase in housing-related saving has been supported by the decline in
https://www.rba.gov.au/publications/rdp/2021/2021-10/conclusion.html
References
10 Nov 2021
RDP
2021-10
Black S, D Titkov and L Wang (2020), ‘Developments in Banks' Funding Costs and Lending Rates’, RBA Bulletin, March. ... Tobin J (1956), ‘The Interest-Elasticity of Transactions Demand for Cash’, The Review of Economics and Statistics, 38(3), pp
https://www.rba.gov.au/publications/rdp/2021/2021-10/references.html