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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 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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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 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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Identifying Repo Market Microstructure from Securities Transactions Data

1 Aug 2018 RDP 2018-09
Nicholas Garvin
These bounds permit greater volatility in market rates in windows with greater volatility in the cash rate. ... Figure 2: Repo Detections at Placebo Rates. Against spread to cash rate or to negative of cash rate, log scale.
https://www.rba.gov.au/publications/rdp/2018/2018-09/full.html
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Results

30 Dec 2008 RDP 2008-09
Richard Finlay and Mark Chambers
Indeed, over the latter part of the sample, government bond yields consistently implied lower forward rates than those seen in analysts' forecasts of the cash rate. ... forecasts. Bond-implied forward rates were briefly above analysts' forecasts of the
https://www.rba.gov.au/publications/rdp/2008/2008-09/results.html
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Disagreement about Inflation Expectations

1 Apr 2016 RDP 2016-02
Alexander Ballantyne, Christian Gillitzer, David Jacobs and Ewan Rankin
when current inflation deviates from the middle of the Reserve Bank of Australia's (RBA) 2–3 per cent target. ... In addition, inattentiveness might actually suggest a narrow distribution, if many responses are always equal to the inflation target.
https://www.rba.gov.au/publications/rdp/2016/2016-02/full.html
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Appendix A: A Small Macroeconomic Model of Australia

31 Dec 2002 RDP 2002-01
Guy Debelle and Jenny Wilkinson
f. is the foreign output gap, measured as deviations of US GDP from a linear trend; r is the real cash rate (the instrument of monetary policy less aggregate inflation); and ... where e is the nominal exchange rate and wp represents world export prices.
https://www.rba.gov.au/publications/rdp/2002/2002-01/appendix-a.html
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Model and Data

31 Dec 2014 RDP 2014-11
Josef Manalo, Dilhan Perera and Daniel Rees
The Australian variables are real GDP, a measure of sectoral production (for example, manufacturing gross value added), trimmed mean inflation, the cash rate and the real TWI. ... Inflation enters the model in quarterly percentage changes, the cash rate
https://www.rba.gov.au/publications/rdp/2014/2014-11/mod-data.html
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Appendix A: Generalising the Optimal Policy Problem

1 Nov 1999 RDP 1999-10
Geoffrey Shuetrim and Christopher Thompson
Likewise, matrices A and C are the marginal impact of the nominal cash rate on the output gap and inflation respectively. ... where I is the same identity matrix used to define the first differences in the cash rates, Δ.
https://www.rba.gov.au/publications/rdp/1999/1999-10/appendix-a.html
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Appendix A: Data

31 Dec 2003 RDP 2003-05
Jonathan Coppel and Ellis Connolly
Cash rate: Bulletin Table A.2. (d). Bank bills: Bulletin Table F.1. ... Bankers acceptances:. BA1–BA8. NZ. Cash rate: RBNZ. Bank bills: RBNZ. Bank bills: RBNZ.
https://www.rba.gov.au/publications/rdp/2003/2003-05/appendix-a.html
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