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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 Term Funding Facility: Has It Encouraged Business Lending?

8 Dec 2022 RDP PDF 2133KB
the provision of credit, thereby supporting economic activity: a reduction in the cash rate to 25 basis. ... with reductions in the cash rate target and 3-year government bond yield target.
https://www.rba.gov.au/publications/rdp/2022/pdf/rdp2022-07.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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Operations in Financial Markets

9 Aug 2023 RBA Annual Report - 2022 PDF 764KB
https://www.rba.gov.au/publications/annual-reports/rba/2022/pdf/operations-in-financial-markets.pdf

Annual Performance Statement

9 Aug 2023 RBA Annual Report - 2022 PDF 186KB
https://www.rba.gov.au/publications/annual-reports/rba/2022/pdf/annual-performance-statement.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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The Implementation of Monetary Policy in Australia

1 Dec 2009 RDP PDF 190KB
It hasalso led to a substantial decline in the volatility of short-term interest rates and morerapid pass-through of changes in the target cash rate into deposit and lending rates. ... The process of announcing changes to the cash rate target has some of
https://www.rba.gov.au/publications/rdp/1997/pdf/rdp9703.pdf

Risk Management

27 Oct 2022 RBA Annual Report – October 2022
Historically, this interest cost has been broadly offset by interest earnings on the domestic asset portfolio, which was mostly comprised of short-term repos earning close to the overnight cash rate. ... problems related to publishing the cash rate.
https://www.rba.gov.au/publications/annual-reports/rba/2022/risk-management.html

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

20 Aug 2019 RDP PDF 1571KB
5. Model Dynamics 31. 5.1 An Increase in the Cash Rate 31. ... In MARTIN, the cash rate influences economic activity primarily through the exchange rate, dwelling.
https://www.rba.gov.au/publications/rdp/2019/pdf/rdp2019-07.pdf

Earnings, Distribution and Capital

27 Oct 2022 RBA Annual Report – October 2022
For all scenarios, the cash rate is projected to evolve in line with the market expectations to June 2023 (using overnight index swap rates as at 31 August), with the margin ... between the cash rate target and the ES rate assumed to remain constant at
https://www.rba.gov.au/publications/annual-reports/rba/2022/earnings-distribution-and-capital.html

The Algorithm

15 Dec 2016 RDP 2016-11
Anthony Brassil, Helen Hughson and Mark McManus
Figure 2: Implied Interest Rates of Algorithm Matches. Implied rate of simple interest, deviation from target cash rate, 2015. ... After rounding observations' implied interest rates to the nearest 0.01 basis point, there are 27 separate transaction
https://www.rba.gov.au/publications/rdp/2016/2016-11/algorithm.html
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