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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 Objectives for, and Conduct of, Monetary Policy in the 1990s | Conference – 1992

21 Jun 1990 Conferences
Charles Goodhart
Moreover, an exchange rate target is more tangible and understandable than a number (how obtained) for some (how and why chosen) abstract ‘M’. ... Depending, therefore, in part on the degree of multilateralism involved, an exchange rate target can
https://www.rba.gov.au/publications/confs/1992/goodhart.html

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

Discussion | Conference – 2018

12 Apr 2018 Conferences
Let's not spend any time on money targets or exchange rate targets. ... Trying to get more impact out of interest rate movements suggests two policy possibilities: raising the inflation target or breaking through the ELB.
https://www.rba.gov.au/publications/confs/2018/mckibbin-panton-disc.html

The Evolution of Financial Deregulation | Conference – 1991

21 Jun 1991 Conferences
Stephen Grenville
meant that even with the interest differential between market rates and the SRD rate rising, the implicit tax of SRD holdings did not increase);. ... The proximate operating objective became the cash rate, and the link between this and commercial rates
https://www.rba.gov.au/publications/confs/1991/grenville.html

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

The Australian Financial System in the 2000s: Dodging the Bullet | Conference – 2011

24 Jul 2000 Conferences
Kevin Davis
As Figure 2 also demonstrates, longer-term rates did not respond to the hikes in the cash rate, while Figure 3 illustrates how risk premia in business and corporate funding rates ... That effect was particularly noticeable in the 1990s when the margin
https://www.rba.gov.au/publications/confs/2011/davis.html

Discussion | Conference – 2017

16 Mar 2017 Conferences
Consider a scenario characterised by persistently low interest rates, with weak real activity and inflation below target. ... The participant argued that, globally, low interest rates could weaken the exchange rate channel of monetary policy due to a
https://www.rba.gov.au/publications/confs/2017/borio-hofmann-disc.html

Discussion on Setting Monetary Policy in East Asia: Goals, Developments and Institutions | Conference – 2001

24 Jul 2001 Conferences
Thus, the interest-rate volatility measure might be more illuminating if it made use of a long interest rate rather than a cash rate. ... On exchange-rate regimes, it was argued that the forces that pushed countries towards floating exchange rates –
https://www.rba.gov.au/publications/confs/2001/mccauley-disc.html

Capital Flows, Hedge Funds and Market Failure: A Hong Kong Perspective | Conference – 1999

9 Aug 1999 Conferences
Joseph CK Yam
Some critics have cited the choice of exchange rate regime as a source of the problem. ... Second, the hedge funds built up short positions in the cash and futures equity markets.
https://www.rba.gov.au/publications/confs/1999/yam.html

Discussion | Conference – 2017

16 Mar 2017 Conferences
The second relationship is between the credit-to-GDP ratio and the lending rate on the debt outstanding, and captures the effect of cash flow constraints that households face due to ... where i. L,t. is the nominal average lending rate on the stock of
https://www.rba.gov.au/publications/confs/2017/cagliarini-price-disc.html