Podcast
Questions and Answers
What is the cash rate?
What is the cash rate?
Who decides whether to change or maintain the cash rate target?
Who decides whether to change or maintain the cash rate target?
What are the monetary policy objectives of the Reserve Bank?
What are the monetary policy objectives of the Reserve Bank?
What is the main purpose of the cash rate?
What is the main purpose of the cash rate?
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What is the range of consumer price inflation that the Reserve Bank aims to keep, on average, over time?
What is the range of consumer price inflation that the Reserve Bank aims to keep, on average, over time?
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When does the Reserve Bank Board meet to decide the cash rate, and where do they usually gather?
When does the Reserve Bank Board meet to decide the cash rate, and where do they usually gather?
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Study Notes
Cash Rate Overview
- The cash rate is the interest rate set by the Reserve Bank of Australia for overnight loans between financial institutions.
- It influences other interest rates in the economy, including those for mortgages and savings.
Decision-Making Authority
- The Reserve Bank Board is responsible for deciding whether to change or maintain the cash rate target.
- Meetings are held to assess economic conditions and determine the appropriate cash rate.
Monetary Policy Objectives
- Reserve Bank aims to stabilize the currency, promote economic growth, and achieve full employment.
- Maintaining consumer price stability is a key focus of their monetary policy.
Purpose of the Cash Rate
- The main purpose of the cash rate is to manage inflation and ensure economic stability.
- It acts as a tool to influence the economy by affecting borrowing costs and consumer spending.
Inflation Target Range
- The Reserve Bank's target range for consumer price inflation is typically set between 2% and 3% on average over time.
- This range is intended to foster economic stability and growth.
Meeting Schedule
- The Reserve Bank Board meets regularly, typically on the first Tuesday of each month.
- Meetings usually take place in Sydney, Australia, where economic conditions and future outlooks are evaluated.
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Description
How well do you know the cash rate? Test your knowledge on the interest rate that drives the Australian economy. Discover its impact on mortgage rates and deposit rates, and learn about its role in managing liquidity between banks. Take this quiz and become an expert on the cash rate!
