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RBA Glossary definition for basis point

basis point – A basis point is 1/100th of 1 per cent or 0.01 per cent, so 100 basis points (bps) is equal to 1 percentage point. The term is used in money and securities markets to define differences in interest or yield. If an interest rate were to increase from 2 per cent to 3 per cent, it is said to have risen by 100 basis points (bps) or one percentage point.

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Monetary Policy, Equity Markets and the Information Effect

23 Mar 2021 RDP 2021-04
Calvin He
For the one-year-ahead forecast, a 100 basis point increase in the OIS curve causes expected earnings growth of the ASX 200 to fall by 1.9 percentage points. ... The one-year-ahead earnings growth forecasts for the materials sector fall by 9.4 percentage
https://www.rba.gov.au/publications/rdp/2021/2021-04/full.html

Results

1 Apr 2021 RDP 2021-04
Calvin He
Figure 3: Response of ASX 200 to Monetary Policy. 100 basis point monetary policy tightening. ... For the one-year-ahead forecast, a 100 basis point increase in the OIS curve causes expected earnings growth of the ASX 200 to fall by 1.9 percentage points.
https://www.rba.gov.au/publications/rdp/2021/2021-04/results.html

Robustness and Extensions

1 Apr 2021 RDP 2021-04
Calvin He
The one-year-ahead earnings growth forecasts for the materials sector fall by 9.4 percentage points following a 100 basis point level increase in the OIS curve. ... Figure 12: Response of ASX 200 to Monetary Policy. 100 basis point monetary policy
https://www.rba.gov.au/publications/rdp/2021/2021-04/robustness-and-extensions.html

Data and Method

1 Apr 2021 RDP 2021-04
Calvin He
To aid interpretability I scale the first factor to the one-month OIS contract; hence a one unit change in this factor can be roughly interpreted as a 100 basis point ... The size of the surprises are generally small, with a standard deviation of around
https://www.rba.gov.au/publications/rdp/2021/2021-04/data-and-method.html

Appendix C: Semi-elasticity versus Elasticity

1 Apr 2021 RDP 2021-04
Calvin He
Figure C1 compares the estimated effect of a 100 basis point monetary policy surprise at different levels of the discount rate. ... Figure C1: Elasticity and Semi-elasticity. 100 basis point monetary policy tightening.
https://www.rba.gov.au/publications/rdp/2021/2021-04/appendix-c.html

Beyond Board Meetings

1 Apr 2021 RDP 2021-04
Calvin He
That is, a monetary policy surprise from a Governor speech is likely smaller than 100 basis points given historical variation. ... Figure 7: Response of ASX 200 to Monetary Policy. 100 basis point monetary policy tightening, by communication type.
https://www.rba.gov.au/publications/rdp/2021/2021-04/beyond-board-meetings.html

Non-technical summary for ‘Monetary Policy, Equity Markets and the Information Effect’

23 Mar 2021 RDP 2021-04
Calvin He
Contrary to the predictions of the information effect hypothesis, however, I estimate that the ASX 200 earnings growth forecasts one year into the future increase by 1.9 percentage points following ... a 100 basis point cut in the cash rate.
https://www.rba.gov.au/publications/rdp/2021/2021-04/non-technical-summary.html

Introduction

1 Apr 2021 RDP 2021-04
Calvin He
In response to a 100 basis point contractionary monetary policy surprise, I estimate that the ASX 200 index declines by around 3 per cent. ... One-year-ahead ASX 200 earnings growth forecasts also fall by 1.9 percentage points following the same monetary
https://www.rba.gov.au/publications/rdp/2021/2021-04/introduction.html