Rb's Economic Role Model

RBA and its relevance to banking and finance lawyers
RBA is a statutory authority and it is Australia’s central banking. RBA’s key role is monetary policy. The RBA explains monetary policy as the process of setting the interest rate on overnight loans in the money market. This is known as the “cash rate”. RBA further explains that the cash rate influences other interest rates in the economy (including the money-market rates and the key rates of banks and financial intermediaries such as mortgage and business loan rates), and this affects the behaviour of borrowers and lenders, economic activity, and ultimately, the rate of inflation.
As mentioned, monetary policy sets the cash rate, and this in turn impacts on the behaviour of financial institutions, such as a bank’s lending behaviour. It is helpful for practitioners to have working knowledge of RBA’s role and powers to better understand clients’ goal and objectives and the basis for them.
Other than being a policy-making body, …show more content…
The Reserve Bank Board meets eleven times per year (around once a month, except January). Minutes are publically available around two weeks post meeting.
Statement on Monetary Policy
Practitioners who wish to better understand RBA’s assessment of current economic conditions can access RBA’s Statement on Monetary Policy (http://www.rba.gov.au/publications/smp/), which is published four times each year. The Statement on Monetary Policy assess the economy from both the domestic and international fronts, and provides and outlook for national inflation and output growth. From time to time, the Statement on Monetary Policy also covers topics of special interest. Recent examples include “The Pick-up in the Chinese Housing Market” and “Wage Developments by Industry”.
Financial Stability