RBA Reserve Bank Of Australia

What is the Reserve Bank of Australia (RBA)? 

The Reserve Bank of Australia (RBA) is the central bank of the nation, tasked with managing the stability of the currency, employment, and economic prosperity. This is achieved through its management of monetary policy and issuing of currency. 

How does the RBA manage monetary policy? 

The RBA manages monetary policy primarily through its control over the official cash rate. This refers to the interest rate that banks pay to borrow money from each other. When the RBA raises the cash rate, borrowing becomes more expensive for individuals and businesses, leading to reduced spending and investment. 

This can slow down economic activity and potentially dampen inflation. Conversely, when the RBA lowers the cash rate, borrowing becomes cheaper, encouraging increased spending and investment, which can stimulate economic growth and job creation. 

How often does the RBA review the cash rate? 

The RBA board meets eight times per year to decide whether the cash rate needs to be adjusted.