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RBA Glossary definition for cash rate target

cash rate target – As in most developed countries, the stance of monetary policy in Australia is expressed in terms of a target for an overnight interest rate. The rate used by the Reserve Bank of Australia is the cash rate (also known as the interbank overnight rate). When the Reserve Bank Board decides that a change in monetary policy should occur, it specifies a new target for the cash rate. A decision to ease policy is reflected in a new lower target for the cash rate, while a decision to tighten policy is reflected in a higher target.

RBA Glossary definition for Cash Rate

Cash Rate – The interest rate which banks pay to borrow funds from other banks in the money market on an overnight basis. The cash rate is the Reserve Bank of Australia's operational target for the implementation of monetary policy. It is also an important financial benchmark in the Australian financial markets. It is used as the reference rate for Australian dollar Overnight Indexed Swaps (OIS) and the ASX 30 Day Interbank Cash Rate Futures. The Reserve Bank of Australia is the administrator of the cash rate. The cash rate is calculated as the weighted average interest rate on overnight unsecured loans between banks settled in the Reserve Bank Information and Transfer System (RITS). The Cash Rate is also known by the acronym AONIA in financial markets.

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The Evolving Structure of the Australian Financial System | Conference – 1996

9 Jul 1996 Conferences
Malcolm Edey and Brian Gray
These concerns partly reflected the fact that key lending rates fell less than one-for-one with cash rates during the extended period of cash-rate reductions in the early 1990s, ... Secondly, abstracting from cyclical movements, both deposit and lending
https://www.rba.gov.au/publications/confs/1996/edey-gray.html

A Factor Model Analysis of the Effects of Inflation Targeting on the Australian Economy | Conference – 2018

12 Apr 2018 Conferences
Luke Hartigan and James Morley
Interestingly, recursive estimates of factor loadings for real gross domestic product (GDP) growth, CPI inflation, and the overnight cash rate (OCR) suggest a stabilisation rather than an abrupt change with the ... Δlog(x. t. ). No. Overnight cash rate
https://www.rba.gov.au/publications/confs/2018/hartigan-morley.html

Emergency Liquidity Injections

1 Oct 2019 RDP 2019-10
Nicholas Garvin
They can allocate l between two types of liquid assets – securities ‘s’ and cash ‘c’. ... r. P. 1. >. r. P. 2. , but equal interest rates across the two policies.
https://www.rba.gov.au/publications/rdp/2019/2019-10/full.html
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Macroprudential Limits on Mortgage Products: The Australian Experience

26 Jul 2021 RDP 2021-07
Nicholas Garvin, Alex Kearney and Corrine Rosé
Comparing the middle and bottom panels makes clear that mortgage rates move fairly closely with the cash rate. ... given that the cash rate is a very strong determinant of mortgage rates.
https://www.rba.gov.au/publications/rdp/2021/2021-07/full.html
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Is the Phillips Curve Still a Curve? Evidence from the Regions

31 Aug 2021 RDP 2021-09
James Bishop and Emma Greenland
These findings have important implications for policy. According to the RBA Board (RBA 2021a), the cash rate will not be raised until inflation is sustainably within the 2 to 3 per ... For example, in response to a persistent negative supply shock a
https://www.rba.gov.au/publications/rdp/2021/2021-09/full.html
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The Role of Collateral in Borrowing

20 Jan 2021 RDP 2021-01
Nicholas Garvin, David W Hughes and José-Luis Peydró
Heightened demand for high-quality collateral is evident from the interest rate differential on collateralised loans across collateral types – rates for first-best collateral fall market-wide by over 100 basis ... In the unsecured market, the overnight
https://www.rba.gov.au/publications/rdp/2021/2021-01/full.html
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The Effect of Credit Constraints on Housing Prices: (Further) Evidence from a Survey Experiment

31 Jan 2023 RDP 2023-01
Tom Cusbert
Figure 3: Effect of Lower Rates on Housing Demand. Mortgage rate lowered from 6.5 per cent to 4.5 per cent. ... The response of WTP to a change in interest rate is little changed across the spectrum of subjective discount rates.
https://www.rba.gov.au/publications/rdp/2023/2023-01/full.html
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Strategies for Controlling Inflation | Conference – 1997

21 Jul 1997 Conferences
Frederic S. Mishkin
Like monetary-aggregate and exchange-rate targets, it is readily understood by the public, but, even more directly than the others, it makes clear the commitment to price stability. ... In contrast to the exchange-rate target, but like the
https://www.rba.gov.au/publications/confs/1997/mishkin.html

Open Market Operations

15 May 2024 RDP 2024-03
Chris Becker, Anny Francis, Calebe de Roure and Brendan Wilson
For each term, the Reserve Bank first allocated cash to the bid which offered to pay the highest repo rate. ... Additional bids were met in descending order until the target size of operations was supplied.
https://www.rba.gov.au/publications/rdp/2024/2024-03/open-market-operations.html
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On the Economics of Committed Liquidity Facilities | Conference – 2013

19 Aug 2013 Conferences
Morten L Bech and Todd Keister
In both facilities, the up-front fee is lower than the spread between the rate for the central bank's standing lending facility and the target for the overnight rate. ... T]his outcome would also significantly affect the ability to meet the cash rate
https://www.rba.gov.au/publications/confs/2013/bech-keister.html