Search: cash rate explained
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 Consequences of Low Interest Rates for the Australian Banking Sector
19 Dec 2022
RDP
PDF
1588KB
others typically pay some spread above the cash rate (or expected future cash rates). ... deposit rates lowers the net income from holding central bank deposits as the cash rate falls.
https://www.rba.gov.au/publications/rdp/2022/pdf/rdp2022-08.pdf
The Yield and Market Function Effects of the Reserve Bank of Australia's Bond Purchases
24 May 2022
RDP
2022-02
OIS rates provide a measure of market expectations for the evolution of the cash rate, and so can be used as at least a partial control to isolate the effect of ... As noted earlier, OIS rates provide a measure of market expectations for the evolution of
https://www.rba.gov.au/publications/rdp/2022/2022-02/full.html
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The Yield and Market Function Effects of the Reserve Bank of Australia’s Bond Purchases
19 May 2022
RDP
PDF
1938KB
AGS yields to term-matched overnight indexed swap (OIS) rates.10 The cash rate target was reduced. ... the expected average overnight cash rate over the term of the OIS contract.
https://www.rba.gov.au/publications/rdp/2022/pdf/rdp2022-02.pdf
BA-MARTIN in Detail
18 Jan 2022
RDP
2022-01
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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MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA’s Macroeconometric Model
12 Jan 2022
RDP
PDF
1774KB
Suthakar 2021; Hack and Nicholls 2021). With deposit rates unable to move below zero, cash rate. ... components: changes in the cash rate, changes in banks’ debt/deposit funding spreads and.
https://www.rba.gov.au/publications/rdp/2022/pdf/rdp2022-01.pdf
The Rise in Household Liquidity
24 Nov 2021
RDP
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1793KB
Midrigan forthcoming). The higher rate of saving has occurred through both amortising mortgage. ... projection methods to demonstrate that lower interest rates are associated with higher household.
https://www.rba.gov.au/publications/rdp/2021/pdf/rdp2021-10.pdf
The Rise in Household Liquidity
10 Nov 2021
RDP
2021-10
The relevant interest rate is derived from RBA statistical table ‘F5 Indicator Lending Rates’. ... Households may respond to this increased risk by increasing their rate of precautionary saving.
https://www.rba.gov.au/publications/rdp/2021/2021-10/full.html
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Monetary Policy, Equity Markets and the Information Effect
24 Oct 2021
RDP
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1573KB
prescription. For example, if the conventional effects of cash rate changes (e.g. ... approximation of the 3 to 5-year growth rate. Cash rate change Monetary policy surprise-4.
https://www.rba.gov.au/publications/rdp/2021/pdf/rdp2021-04.pdf
Macroprudential Limits on Mortgage Products: The Australian Experience
4 Aug 2021
RDP
PDF
2345KB
quarter t , minus the cash rate, in percentage points. It is first differenced in most regressions. ... controls, given that the cash rate is a very strong determinant of mortgage rates.
https://www.rba.gov.au/publications/rdp/2021/pdf/rdp2021-07.pdf
Macroprudential Limits on Mortgage Products: The Australian Experience
26 Jul 2021
RDP
2021-07
Comparing the middle and bottom panels makes clear that mortgage rates move fairly closely with the cash rate. ... given that the cash rate is a very strong determinant of mortgage rates.
https://www.rba.gov.au/publications/rdp/2021/2021-07/full.html
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