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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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Conclusion

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
RDP 2018-05: Do Interest Rates Affect Business Investment? Evidence from Australian Company-level Data 5. ... These findings have important implications for monetary policy. In particular, the low level of both the cash rate and average business lending
https://www.rba.gov.au/publications/rdp/2018/2018-05/conclusion.html

Do Interest Rates Affect Business Investment? Evidence from Australian Company-level Data

1 Apr 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
companies (the ‘riskier’ companies) having remained high in recent years despite falls in the cash rate and in aggregate indicators of business lending rates. ... This suggests that declines in the cash rate in recent years have not necessarily
https://www.rba.gov.au/publications/rdp/2018/2018-05/full.html

Data and Stylised Facts

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
The median borrowing rate paid by companies in our sample has declined to its lowest level since 2004, alongside the cash rate and aggregate indicators of business lending rates (Figure 1). ... This suggests that declines in the cash rate in recent years
https://www.rba.gov.au/publications/rdp/2018/2018-05/data-and-stylised-facts.html

Accounting for Sample Selection

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
This might be the case if, for instance, companies that have outstanding floating-rate debt receive higher cash flows when rates fall, which could stimulate investment if they are financially constrained ... Ippolito, Ozdagli and Perez-Orive 2017).
https://www.rba.gov.au/publications/rdp/2018/2018-05/accounting-for-sample-selection.html

Appendix B: Tobin's q Models

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
RDP 2018-05: Do Interest Rates Affect Business Investment? Evidence from Australian Company-level Data Appendix B: Tobin's q Models. ... A 1 per cent decrease in the cost of debt is associated with a percentage point rise in the investment rate.
https://www.rba.gov.au/publications/rdp/2018/2018-05/appendix-b.html

Introduction

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
companies (the ‘riskier’ companies) having remained high in recent years despite falls in the cash rate and in aggregate indicators of business lending rates. ... Our results do not establish why there is a link between interest rates and investment
https://www.rba.gov.au/publications/rdp/2018/2018-05/introduction.html

Appendix C: Multiple Imputation Model

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
RDP 2018-05: Do Interest Rates Affect Business Investment? Evidence from Australian Company-level Data Appendix C: Multiple Imputation Model. ... Schenker and Taylor 1996). Given the relationship between interest rates and the variables in Z.
https://www.rba.gov.au/publications/rdp/2018/2018-05/appendix-c.html

References

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
RDP 2018-05: Do Interest Rates Affect Business Investment? Evidence from Australian Company-level Data References. ... Lane K and T Rosewall (2015), ‘Firms' Investment Decisions and Interest Rates’, RBA Bulletin, June, pp 1–7.
https://www.rba.gov.au/publications/rdp/2018/2018-05/references.html

Reduced-form Model

6 May 2018 RDP 2018-05
Jonathan Hambur and Gianni La Cava
RDP 2018-05: Do Interest Rates Affect Business Investment? Evidence from Australian Company-level Data 3. ... where. is the net investment rate, which is approximately the log change in the capital stock.
https://www.rba.gov.au/publications/rdp/2018/2018-05/reduced-form-model.html