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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 Australian Financial System

8 Apr 2022 FSR – April 2022
Until recently, banks were offering lower interest rates on fixed-rate loans, which – along with borrower preference and loan refinancing – resulted in a shift towards fixed-rate mortgage products that have ... While a large share of banks'
https://www.rba.gov.au/publications/fsr/2022/apr/australian-financial-system.html

Box D: Stress Testing and Australian Bank Resilience

7 Oct 2022 FSR – October 2022
In response to high inflation, the Reserve Bank has increased the cash rate target by a total of 250 basis points since May 2022, and market pricing implies the cash rate ... Baseline scenario. – the cash rate increases broadly in line with current
https://www.rba.gov.au/publications/fsr/2022/oct/box-d-stress-testing-and-australian-bank-resilience.html

The Australian Financial System

10 Mar 2014 FSR – March 2014
available to participants via repurchase agreements (repos) with an open-ended repurchase date that is contracted at the cash rate target. ... Any surplus ESA funds earn a rate 25 basis points below the cash rate target, while any shortfall incurs a 25
https://www.rba.gov.au/publications/fsr/2014/mar/aus-fin-sys.html

Overview

4 Oct 2019 FSR – October 2019
Domestically, government bond yields have fallen by more than international yields this year as the expected path of the cash rate has declined. ... The cuts to the cash rate, and the resulting reductions in borrowing rates, have contributed to a
https://www.rba.gov.au/publications/fsr/2019/oct/overview.html

The Australian Financial System

20 Oct 2018 FSR – October 2018
Interest rates in short-term wholesale funding markets have risen notably this year, despite the official cash rate remaining stable. ... debt. Non-ADI lenders' funding costs are also more affected by the recent increase in BBSW rates, since all of their
https://www.rba.gov.au/publications/fsr/2018/oct/aus-fin-sys.html

Mortgage Macroprudential Policies

8 Oct 2021 FSR – October 2021
For affected new borrowers, this would cap their debt-servicing costs for a given interest rate and ensure they have larger cash buffers when they take out their loan. ... This serviceability assessment rate accounts for potential increases in interest
https://www.rba.gov.au/publications/fsr/2021/oct/mortgage-macroprudential-policies.html

The Australian and Global Financial Systems

9 Apr 2020 FSR – April 2020
This reflects that a portion of banks' deposits receive no or very low rates of interest, making them difficult to reprice lower when the cash rate declines. ... The lift in the rate of remuneration of exchange settlement balances (relative to the cash
https://www.rba.gov.au/publications/fsr/2020/apr/the-australian-and-global-financial-systems.html

The Australian Financial System

20 Apr 2016 FSR – April 2016
The major banks' average outstanding deposit rate has fallen by almost 60 basis points since the start of last year, compared with a 50 basis point decline in the cash rate ... To date it appears that most funds have responded to lower returns by
https://www.rba.gov.au/publications/fsr/2016/apr/aus-fin-sys.html

The Australian Financial System

10 Mar 2015 FSR – March 2015
Some of the major banks' at-call and term deposit rates have declined by more than the cash rate over this period – for example, interest rates on some ‘bonus’ savings accounts ... Accordingly, two major banks have recently announced an increase in
https://www.rba.gov.au/publications/fsr/2015/mar/aus-fin-sys.html

Regulatory Developments

4 Oct 2019 FSR – October 2019
the CFR's policy framework for competition in the clearing and settlement of Australian cash equities. ... the enforcement of the CFR's regulatory expectations for monopoly providers of cash equity CS services.
https://www.rba.gov.au/publications/fsr/2019/oct/regulatory-developments.html