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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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The Transmission of Monetary Policy through Banks' Balance Sheets | Conference – 2018

12 Apr 2018 Conferences
Anthony Brassil, Jon Cheshire and Joseph Muscatello
This is an important question for the RBA – understanding how cash rate changes are passed through to banks' lending and deposit rates ensures the RBA can set its cash rate target ... The effect of the cash rate on provisioning rates may diminish at
https://www.rba.gov.au/publications/confs/2018/brassil-cheshire-muscatello.html

Twenty-five Years of Inflation Targeting in Australia | Conference – 2018

12 Apr 2018 Conferences
Guy Debelle
But inflation was still at its post-recession lows of 2 per cent when the RBA increased the cash rate by 275 basis points in three moves over the second half ... The fact that inflation was still high as these events unfolded did not constrain the
https://www.rba.gov.au/publications/confs/2018/debelle.html

The Impact of Unconventional Monetary Policy on the Overnight Interbank Market | Conference – 2013

19 Aug 2013 Conferences
Morten L Bech and Cyril Monnet
The target rate in turn influenced other interest rates and hence financing conditions in the wider economy. ... These data are used to calculate the Bank's measure of the Interbank Overnight Cash Rate (IBOC), which is the Reserve Bank Board's
https://www.rba.gov.au/publications/confs/2013/bech-monnet.html

The Smoothing of Official Interest Rates | Conference – 1997

21 Jul 1997 Conferences
Philip Lowe and Luci Ellis
Median. Mean. Median. Australia. Cash rate. target. 7/85–5/97. 1/92–5/97. 74. 121. ... I. t. is the cash rate target at the time that the survey is undertaken;.
https://www.rba.gov.au/publications/confs/1997/lowe-ellis.html

The Consequences of Low Interest Rates for the Australian Banking Sector

29 Dec 2022 Conferences PDF 1221KB
RBA Annual Conference 2022
https://www.rba.gov.au/publications/confs/2022/pdf/rba-conference-2022-brassil.pdf

The Welfare Effects of Alternative Choices of Instruments and Targets for Macroeconomic Stabilisation Policy | Conference – 1997

21 Jul 1997 Conferences
John Quiggin
If real interest rates are constant, variations in the inflation rate translate directly into variations in the nominal interest rate, and only the return to cash is affected. ... Thus, a practical method of implementing a target of stable real interest
https://www.rba.gov.au/publications/confs/1997/quiggin.html

The Smoothing of Official Interest Rates

7 Dec 2006 Conferences PDF 190KB
RBA Conference Volume 1997
https://www.rba.gov.au/publications/confs/1997/pdf/lowe-ellis.pdf

Central Bank Frameworks: Evolution or Revolution?

4 Jan 2023 Conferences PDF 7522KB
RBA Conference Volume 2018
https://www.rba.gov.au/publications/confs/2018/pdf/rba-conference-volume-2018.pdf

The Cost of Inflation in Australia | Conference – 1992

10 Jul 1992 Conferences
Doug McTaggart
In addition, because housing loan interest costs are not deductible, and because nominal housing loan rates might rise in excess of the rate inflation due to the tax-adjusted Fisher effect ... Suppose borrowers and lenders face different marginal tax
https://www.rba.gov.au/publications/confs/1992/mctaggart.html

Evaluating Simple Monetary-policy Rules for Australia | Conference – 1997

21 Jul 1997 Conferences
Gordon de Brouwer and James O'Regan
The first six of these rules set the nominal cash rate in response to the deviation of a variable, or set of variables, from a target. ... Interest rates are stable, however, since inflation is now lower than the target rate by the exact amount that
https://www.rba.gov.au/publications/confs/1997/de-brouwer-oregan.html