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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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Endogenous Production Networks and Non-linear Monetary Transmission

19 Dec 2023 Research Workshop PDF 2202KB
RBA Workshop 2023
https://www.rba.gov.au/publications/workshops/research/2023/pdf/rba-workshop-2023-ghassibe.pdf

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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Optimal Monetary Policy when Expectations are Rational, Fixed, Learned, or Anything in Between

19 Dec 2023 Research Workshop PDF 410KB
RBA Workshop 2023
https://www.rba.gov.au/publications/workshops/research/2023/pdf/rba-workshop-2023-presentation-brassil.pdf

BA-MARTIN in Detail

18 Jan 2022 RDP 2022-01
Anthony Brassil, Mike Major and Peter Rickards
cash rate and banks' cost of funding increases as the cash rate falls. ... By cash rate level. The lending spreads banks charge above their costs of debt funding have historically been unrelated to the level of interest rates (see Graph 13 in Garner and
https://www.rba.gov.au/publications/rdp/2022/2022-01/ba-martin-in-detail.html
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Can We Use High-frequency Yield Data to Better Understand the Effects of Monetary Policy and Its Communication? Yes and No!

1 May 2023 RDP PDF 1465KB
dwelling approvals, the mortgage spread (variable owner-occupier rate less cash rate; adjusted for. ... Many papers incorporate specific interest rates, such as the cash rate, or other short-term interest.
https://www.rba.gov.au/publications/rdp/2023/pdf/rdp2023-04.pdf

The Impact of Interest Rates on Bank Profitability: A Retrospective Assessment Using New Cross-country Bank-level Data

21 Jun 2023 RDP 2023-05
Callan Windsor, Terhi Jokipii and Matthieu Bussiere
Starting with the impact on banks' interest margins, several studies identify a nonlinear relationship between interest rates and NIMs, with the marginal impact of a cut to the cash rate larger ... In fact, for France, Norway and Poland a further
https://www.rba.gov.au/publications/rdp/2023/2023-05/full.html
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The Impact of Interest Rates on Bank Profitability: A Retrospective Assessment Using New Cross-country Bank-level Data

8 Jun 2023 RDP PDF 1310KB
between interest rates and NIMs, with the marginal impact of a cut to the cash rate larger in low. ... pricing power. As a result, following a cut to cash rates, these banks can ensure the fall in their.
https://www.rba.gov.au/publications/rdp/2023/pdf/rdp2023-05.pdf

The Term Funding Facility: Has It Encouraged Business Lending?

13 Dec 2022 RDP 2022-07
Sharon Lai, Kevin Lane and Laura Nunn
On 19 March 2020, the RBA introduced a range of measures to lower funding costs and encourage the provision of credit, thereby supporting economic activity: a reduction in the cash rate ... In November 2020, the cost of new funding under the TFF was
https://www.rba.gov.au/publications/rdp/2022/2022-07/full.html
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Results

27 Feb 2018 RDP 2018-02
Jonathan Hambur and Richard Finlay
na. na. σ. cash rate. 0.0037. (0.0001). na. na. na. na. ... Specifically, we estimated a model of nominal rates using the methodology outlined in Adrian et al (2013), but extended to include cash rate forecasts.
https://www.rba.gov.au/publications/rdp/2018/2018-02/results.html
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The Distributional Effects of Monetary Policy: Evidence from Local Housing Markets

14 Feb 2020 RDP PDF 1878KB
In the baseline models, the stance of monetary policy is measured by the cash rate target, as. ...  tcr represents the quarterly percentage point change in the cash rate target.
https://www.rba.gov.au/publications/rdp/2020/pdf/rdp2020-02.pdf