Reserve Bank of Australia

The Reserve Bank of Australia (RBA) was established 14 January 1960 as Australia’s central bank. Under the legislation, the Reserve Bank Act 1959, the RBA has various responsibilities and aims it strives to achieve. In this summary, the function, aims and instruments of the RBA will discussed. In the end of the summary there will be a concluding statement on how suitable a central bank of this style would be for a developing country. There are three main objectives the Reserve Bank of Australia aims to maintain through its function. These are maintaining full employment, stability of the currency, and the welfare and economic prosperity of the people of Australia. Through creation of economic incentive, the RBA keeps the Australian economy stable and prevent ‘overheating’. This means preventing inflation, when there is overproduce and excess production capacity. Inflation was also the main cause of the Great Depression in the early 20th century. Other than these objectives, the Reserve bank also functions to ensure the production of the following: • provide special banking services to foreign official institutions and to government, such as payments, collections, general account maintenance and reporting • the production and design of Australia's banknotes, as well as handling the issues to…

remain unchanged. The main purpose of this recommendation is to satisfy the three main objectives of the Reserve Bank of Australia. We look at the some of the factors that affects the RBA cash rate such as International economic conditions, domestic conditions of Australia and the stability of financial markets in Australia. International economic conditions: One of the major issue that Reserve bank of Australia should take into account is the effect of the International economic conditions.…

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…

data gave by the Reserved Bank of Australia. According to (Investopedia; 2016), there are different outside powers that has been controlling the conduct of activity of Australian dollar or pound. The separation in the estimation of cash of pound and Australian dollar is because of the variety in the rate of enthusiasm of the banks of these two nations which is somewhat little yet makes more noteworthy impact. There are different variables in charge of diminishing the esteem which can be either…

IMF’s primary responsibility is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. Created in 1945, the IMF is governed by and accountable to the 188 countries that make up its near-global membership. Australia officially became a member of the IMF August 05, 1947 (International Monetary Fund, 2015). From Bretton Woods to a Free Float System Australia has…

of Australian Financial Institutions. 4 2. Overview of International Banking System. 5 3. Overview of Shadow Banking. 6 3.1. Viability of Shadow Banking in Australia. 6 3.2. Viability of Shadow Banking internationally. 6 3.3. Comparison of Shadow Banking internationally and in Australia. 6 4. Conclusions. 6 References 7 Executive Summary 1. Overview of Australian Financial Institutions. Financial system is a key influencer of the health and efficiency of an economy (Kidwell, et al., 2014, p…

which are natural monopolies. I argue that there is little contemporary support in Australia for the privatisation of natural monopolies. If a government enterprise operating in a competitive market can be sold at the right price, however, and the sale accords with public opinion, then overall utility is enhanced and an indisputable political benefit has been…

increases their profit. The opposite can be said for imports, where a high valued dollar makes the importing more expensive while a less valued dollar makes it cheaper. The price of imports has broader impact on businesses than just the businesses which deal directly with importing products. This is because the more expensive importing is for the country, the more expensive other commodities such as petrol will be, which will increase costs in other areas such as transport. The price of the…

The key measure of external stability is the current account deficit. Historically, Australia’s CAD has been increasing over the past decades being 1.1% of GDP in 1970s to 4.4% in the 2000s (RBA, 2015). Currently, CAD is 3.2% of GDP and is forecasted to be 4% next year. Australia’s persistent CAD has been an external stability issue for Australia and factors that contribute to high CAD include narrow export base, manufacturing competitiveness, and accumulated foreign debt. Australia has a narrow…

i. What mechanisms were created after World War Two for supporting sovereign state solvency as well as coordinating global trade and finance? When the World War II ended, the economy of many countries of Europe was devastated, so it was necessary to create viable systems or plans which would help to these economies recovering. Besides the Marshall Plan, which was a program created by the American government after World War II to help European states recovering, the international community…