Reserve Bank of Australia
The RBA’s main purpose it to conduct monetary policy. It is a completely seperate entity of the government and sets the Cash Rate, which dicates the cost of borrowing/credit for households and businesses.
Policy Objectives
- The (price) stability of the currency of Australia
- The maintenance of full employment in Australia; and
- The Economic prosperity and welfare of the people of Australia
The RBA attempts to maintain;
- Price Stability by keeping Consumer Price Inflation at 2-3% on average, over the course of the business cycle.
- Economic Prosperity and Welfare, making sure there are rising living standards in the long-term (economic growth).
- Full Employment by acheiving the ”natural rate of unemployment”. (~4% as of 2022)
- Close to zero Cyclical Unemployment, but some Frictional, and Structural Unemployment.
Obligations
- To Conduct Monetary Policy
- The maintenance of the Financial Payments system
To Conduct Monetary Policy
- Nime member RBA Board holds it’s monetary policy meeting on the first Tuesday of each month (except january), to decide on whether to change the cash rate.
- They review data from large sets of domestic and international sources.
- ABS Data release
- Privately compiled business surveys
- much more
- Does report to government to ‘Inform on the Bank’s Monetary and banking Policy