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On this page, you will read about everything you need to know about the Reserve Bank of Australia (RBA) including its latest monetary policy decisions and market-moving speeches.
The Reserve Bank of Australia or the RBA is the central bank of Australia. It succeeded the Commonwealth Bank of Australia which was established 10 years after the country gained independence from the UK. It began managing the local currency in 1924, which was back then known as the Australian pound. Then in 1959, it was tasked as the monetary authority in charge of issuing banknotes in the country.
A Hawkish Central Bank
Given Australia’s export-oriented and commodity-driven economy, its inflation is relatively higher than in other countries. Consequently, managing the rate at which price increases have always been at the top of the RBA’s agenda. The central bank does not always make changes to its deposit rate.
However, remarks on inflation are always enough to spark volatility on the Australian dollar. The RBA has been characterized as a hawkish central bank which means that markets see it as being sensitive to inflationary pressures.
The RBA’s Mandates
When the central bank adopted a freely-floating exchange rate in 1983, ensuring that exchange rates were trading at levels sustainable to growth also become a priority.
Along with the RBA’s list of mandates is also aiming for full employment or the level at which there is a balance between unemployment and inflation.
The central bank is composed of two boards. One, the Payments System Board, ensures that there is financial stability and that payment systems in the country are efficient. Meanwhile, the Reserve Bank Board is the decision-making body that dictates where interest rates should go. The board is made up of nine members, including the Governor.
It is tasked with adjusting money supply in the economy that aligns with the central bank’s mandates. They then announce their monetary policy decisions 11 times per year.
Who Heads the RBA?
Since 2016, the Reserve Bank of Australia has been headed by Philip Lowe.
RBA News and Analysis
Vaccine-driven risk flows allowed risky currency assets to gain traction on Monday, with the AUDUSD on course towards 2-month highs at the time of writing ahead of Tuesday’s RBA minutes. Reserve Bank of Australia (RBA) Governor Phillip Lowe, who seems to have formed a habit of dropping market-moving lines just […]
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The AU GDP is expected to drop -6.0%. Check out how the AUDUSD may respond by signing up to read the article.