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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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Central Bank Frameworks: Evolution or Revolution?

4 Jan 2023 Conferences PDF 7522KB
RBA Conference Volume 2018
https://www.rba.gov.au/publications/confs/2018/pdf/rba-conference-volume-2018.pdf

The Yield and Market Function Effects of the Reserve Bank of Australia's Bond Purchases

24 May 2022 RDP 2022-02
Richard Finlay, Dmitry Titkov and Michelle Xiang
same time announced a reduction in the cash rate target from 50 basis points to 25 basis points. ... although the observed effect is confounded with the reduction in the cash rate target, announced at the same time (Figure 4).
https://www.rba.gov.au/publications/rdp/2022/2022-02/full.html
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The Term Funding Facility: Has It Encouraged Business Lending?

8 Dec 2022 RDP PDF 2133KB
the provision of credit, thereby supporting economic activity: a reduction in the cash rate to 25 basis. ... with reductions in the cash rate target and 3-year government bond yield target.
https://www.rba.gov.au/publications/rdp/2022/pdf/rdp2022-07.pdf

The Implementation of Monetary Policy in Australia

1 Dec 2009 RDP PDF 190KB
It hasalso led to a substantial decline in the volatility of short-term interest rates and morerapid pass-through of changes in the target cash rate into deposit and lending rates. ... The process of announcing changes to the cash rate target has some of
https://www.rba.gov.au/publications/rdp/1997/pdf/rdp9703.pdf

MARTIN Has Its Place: A Macroeconometric Model of the Australian Economy

20 Aug 2019 RDP PDF 1571KB
5. Model Dynamics 31. 5.1 An Increase in the Cash Rate 31. ... In MARTIN, the cash rate influences economic activity primarily through the exchange rate, dwelling.
https://www.rba.gov.au/publications/rdp/2019/pdf/rdp2019-07.pdf

The Welfare Effects of Alternative Choices of Instruments and Targets for Macroeconomic Stabilisation Policy | Conference – 1997

21 Jul 1997 Conferences
John Quiggin
If real interest rates are constant, variations in the inflation rate translate directly into variations in the nominal interest rate, and only the return to cash is affected. ... Thus, a practical method of implementing a target of stable real interest
https://www.rba.gov.au/publications/confs/1997/quiggin.html

The Evolution of Consumer Payments in Australia: Results from the 2022 Consumer Payments Survey

27 Nov 2023 RDP 2023-08
Tanya Livermore, Jack Mulqueeney, Thuong Nguyen and Benjamin Watson
services. Figure 5: Trends in Card and Cash Payments. Share of number of payments. ... top-up source, compared to about 70 per cent for low cash users.
https://www.rba.gov.au/publications/rdp/2023/2023-08/full.html
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The Cost of Inflation in Australia | Conference – 1992

10 Jul 1992 Conferences
Doug McTaggart
In addition, because housing loan interest costs are not deductible, and because nominal housing loan rates might rise in excess of the rate inflation due to the tax-adjusted Fisher effect ... Suppose borrowers and lenders face different marginal tax
https://www.rba.gov.au/publications/confs/1992/mctaggart.html

Optimal Monetary Policy when Expectations are Rational, Fixed, Learned, or Anything in Between

19 Dec 2023 Research Workshop PDF 410KB
RBA Workshop 2023
https://www.rba.gov.au/publications/workshops/research/2023/pdf/rba-workshop-2023-presentation-brassil.pdf

Australian Money Market Divergence: Arbitrage Opportunity or Illusion?

1 Sep 2019 RDP 2019-09
Belinda Cheung and Sebastien Printant
Note: (a) Discounted variable rates on owner-occupier housing loans; spread to cash rate. ... In the first instance, we make the deliberately extreme assumption that investments can be funded at the overnight cash rate target.
https://www.rba.gov.au/publications/rdp/2019/2019-09/full.html
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