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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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Expectations and the Neutrality of Interest Rates

27 Nov 2023 Conferences PDF 477KB
RBA Annual Conference 2023
https://www.rba.gov.au/publications/confs/2023/pdf/rba-conference-2023-cochrane.pdf

Evaluating Simple Monetary-policy Rules for Australia | Conference – 1997

21 Jul 1997 Conferences
Gordon de Brouwer and James O'Regan
The first six of these rules set the nominal cash rate in response to the deviation of a variable, or set of variables, from a target. ... Interest rates are stable, however, since inflation is now lower than the target rate by the exact amount that
https://www.rba.gov.au/publications/confs/1997/de-brouwer-oregan.html

Endogenous Production Networks and Non-linear Monetary Transmission

19 Dec 2023 Research Workshop PDF 2202KB
RBA Workshop 2023
https://www.rba.gov.au/publications/workshops/research/2023/pdf/rba-workshop-2023-ghassibe.pdf

Can We Use High-frequency Yield Data to Better Understand the Effects of Monetary Policy and Its Communication? Yes and No!

1 May 2023 RDP PDF 1465KB
dwelling approvals, the mortgage spread (variable owner-occupier rate less cash rate; adjusted for. ... Many papers incorporate specific interest rates, such as the cash rate, or other short-term interest.
https://www.rba.gov.au/publications/rdp/2023/pdf/rdp2023-04.pdf

DSGE Reno: Adding a Housing Block to a Small Open Economy Model

1 Apr 2018 RDP 2018-04
Christopher G Gibbs, Jonathan Hambur and Gabriela Nodari
relatively high sensitivity of housing investment to changes in interest rates (e.g. ... The Australian economy is summarised by standard aggregate variables such as GDP growth, consumption growth, CPI inflation and the cash rate, as well as several
https://www.rba.gov.au/publications/rdp/2018/2018-04/full.html
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Demand in the Repo Market: Indirect Perspectives from Open Market Operations from 2006 to 2020

9 May 2024 RDP PDF 4625KB
fixed interest rate in exchange for receiving the average cash rate recorded over the term of the swap. ... from financial institutions. This measure of the cash rate has been published by the Reserve Bank.
https://www.rba.gov.au/publications/rdp/2024/pdf/rdp2024-03.pdf

The Distributional Effects of Monetary Policy: Evidence from Local Housing Markets

14 Feb 2020 RDP PDF 1878KB
In the baseline models, the stance of monetary policy is measured by the cash rate target, as. ...  tcr represents the quarterly percentage point change in the cash rate target.
https://www.rba.gov.au/publications/rdp/2020/pdf/rdp2020-02.pdf

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

1 Aug 2019 RDP 2019-07
Alexander Ballantyne, Tom Cusbert, Richard Evans, Rochelle Guttmann, Jonathan Hambur, Adam Hamilton, Elizabeth Kendall, Rachael McCririck, Gabriela Nodari and Daniel Rees
The central bank sets the cash rate according to a monetary policy reaction function that responds to deviations of trimmed mean inflation from the inflation target, the unemployment gap and the ... The central bank adjusts interest rates to ensure that
https://www.rba.gov.au/publications/rdp/2019/2019-07/full.html
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China’s Evolving Monetary Policy Framework in International Context

4 Dec 2019 RDP PDF 1923KB
implementation such as open market operations and the corridor system for interest rates. ... Inflation. Operational target(s) Monetary base. 7-day interbank repo rate. Overnight cash rate target.
https://www.rba.gov.au/publications/rdp/2019/pdf/rdp2019-11.pdf

The Evolution of Monetary Policy: From Money Targets to Inflation Targets | Conference – 1997

21 Jul 1997 Conferences
Stephen Grenville
In the newly evolved operational procedures, monetary policy was implemented via the cash rate (Macfarlane 1984). ... 9, 14). The desirability of an intermediate target was acknowledged, but the possible intermediate targets (monetary aggregates or the
https://www.rba.gov.au/publications/confs/1997/grenville.html