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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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Monetary Policy, Equity Markets and the Information Effect

23 Mar 2021 RDP 2021-04
Calvin He
Consistent with standard models, unexpected increases in the cash rate cause equity prices to fall (Figure 3). ... The absolute value of the effect is much smaller when using the cash rate as the independent variable.
https://www.rba.gov.au/publications/rdp/2021/2021-04/full.html

Robustness and Extensions

1 Apr 2021 RDP 2021-04
Calvin He
0. ]. is an indicator variable for when the cash rate target was changed, and. ... Prior to December 2007, monetary policy board decisions were only accompanied with a statement if there was a change in the cash rate target.
https://www.rba.gov.au/publications/rdp/2021/2021-04/robustness-and-extensions.html

Appendix A: Data Description

1 Apr 2021 RDP 2021-04
Calvin He
Source. Start date. End date. Missing data. Cash rate target. RBA.
https://www.rba.gov.au/publications/rdp/2021/2021-04/appendix-a.html

References

1 Apr 2021 RDP 2021-04
Calvin He
Brassil A (2019), ‘How Insufficiently Responsive Monetary Policy Can Lead to a Positive Relationship between Consumer Confidence and the Cash Rate’, Unpublished manuscript, Reserve Bank of Australia, 18 December. ... Cook T and T Hahn (1989), ‘The
https://www.rba.gov.au/publications/rdp/2021/2021-04/references.html

Discussion, Limitations and Future Research

1 Apr 2021 RDP 2021-04
Calvin He
This may especially be the case in the current situation where the RBA's cash rate target is close to the zero lower bound and the RBA has also implemented a ... yield curve target for the 3-year government bond rate.
https://www.rba.gov.au/publications/rdp/2021/2021-04/discussion-limitations-and-future-research.html