Our Role – The Reserve Bank of Australia
Australia's Central Bank
Commenced operations in 1960
- Monetary policy
- Market operations
- Financial stability
- Payments system
- Government banking
- Head Office in Sydney
- State Offices in Adelaide, Brisbane, Melbourne and Perth
- Branch in Canberra
- Overseas offices in Beijing, London and New York
- Stability of the currency
- Full employment
- Economic prosperity and welfare of the people of Australia
- Keep inflation at 2–3 per cent, on average, over the medium term
Reserve Bank Board
- Governor, Deputy Governor, Treasury Secretary and six external members
- Monthly meeting includes a decision about setting the cash rate
The RBA adjusts the cash rate to try and keep the growth of total spending in line with potential output thereby ensuring that inflation is low and stable.
Adjusting the cash rate affects spending and inflation through several channels, such as:
More information about Monetary Policy.
- To implement monetary policy, the RBA sets the cash rate
- Banks borrow or lend from each other overnight at the cash rate
- Open market operations keep the cash rate at target each day
The RBA keeps the cash rate at target by setting the supply of funds in exchange settlement accounts so that it is consistent with demand.
Raises account balances
- RBA buys government bonds
- Government makes outlays
- Banks return banknotes
Lowers account balances
- RBA sells government bonds
- Government receives revenue
- RBA issues banknotes
More information about Market Operations.
Foreign Exchange Reserves
- The RBA holds foreign exchange reserves to support monetary policy and Government banking
- Income earned on reserves is paid over time to the Australian Government
The RBA only intervenes in foreign exchange markets if:
- disorderly market conditions
- clear overshooting (large movement not supported by fundamentals)
- The RBA does not target a particular level of the exchange rate
- Smooth flow of funds between savers and investors supports economic growth
- Safe and robust financial market infrastructure
- Coordinate with financial regulators
- Crisis management capability, including liquidity support
- The RBA monitors financial system health, published in the Financial Stability Review
More information about Financial Stability.
- Allows consumers and businesses to transfer funds to each other
Payments System Board
- Promotes efficiency and competition in means of payment, including credit and debit cards
- Oversees key financial market infrastructure to promote stability in the payments system
Reserve Bank Information and Transfer System (RITS)
- The RBA runs Australia's real-time gross settlement system
RBA at the core, settling all electronic transactions between banks securely.
More information about Payments System.
- Banker to the Australian Government, maintaining its core cash accounts
Facilitate government payments to households and businesses, including on behalf
- Australian Taxation Office
More information about Government Banking.
- The RBA manages Australia's banknotes, including production, issue and distribution
- Aim to maintain Australians' confidence in banknotes as a payment method
- Printed on polymer substrate with hard-to-counterfeit security features
- Meet the demand of households and businesses for banknotes
- Maintain high quality by withdrawing and replacing damaged notes
More information about Banknotes.