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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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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
Business lending rate. Per cent. Nominal. RBA. NBRSP. Business spread to cash rate. ... RBA. NMR. Mortgage rate. Per cent. Nominal. RBA. NMRSP. Mortgage rate spread to cash rate.
https://www.rba.gov.au/publications/rdp/2019/2019-07/full.html

Model Dynamics

23 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 increase in the cash rate translates into higher mortgage and business lending rates, which raises borrowing costs for firms and households. ... Therefore, the particular cash rate path that we consider involves a 75 basis point reduction in interest
https://www.rba.gov.au/publications/rdp/2019/2019-07/model-dynamics.html

Core Equations

23 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
Business lending rate. Per cent. Nominal. RBA. NBRSP. Business spread to cash rate. ... Changes in the cash rate influence economic activity and inflation largely through their effect on other interest rates in the economy.
https://www.rba.gov.au/publications/rdp/2019/2019-07/core-equations.html

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
World real policy rate (wrr). World real policy rate spread to the Australian cash rate (wrsp). ... The code runs five scenarios:. s1 => A 100 bps increase in the cash rate sustained for four quarters.
https://www.rba.gov.au/publications/rdp/2019/2019-07/read-me.html

A Stylised Description of the Model

23 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
Nonetheless, for some model simulations, we allow the cash rate to deviate from what the rule suggests. ... For example, it is often instructive to examine how a shock would propagate through the economy if the cash rate were held constant.
https://www.rba.gov.au/publications/rdp/2019/2019-07/a-stylised-description-of-the-model.html