How Monetary Policy is Implemented Flashcards
1
Q
what is convential monetary polic
A
cash rate is the main policy tool announced by RBA which then uses open market operations to achieve the desired cash rate
2
Q
what is the cash rate
A
the interest rate set by RBA charging other banks for loans from RBA, determined by demand/supply of overnight funds between banks and RBA
3
Q
what are exchange settlement accounts
A
banks keep funds (ESA) at RBA to settler transactions with other banks
4
Q
how often does the RBA board meet
A
MP reviewed first tuesday each month with banks staff to analyse domestic/internationl economic indicators
5
Q
how often is the cash rate changed
A
11 times a year (not in jan) by 0.25% usually
