The Reserve Bank of Australia (RBA) is Australia’s central bank. It has a wide range of responsibilities, including:
- Monetary policy: The RBA’s main goal is to keep inflation low and stable, which it does by setting the cash rate. This is the interest rate that banks charge each other for overnight loans. By changing the cash rate, the RBA can influence borrowing and lending throughout the economy, which in turn affects inflation.
- Financial system stability: The RBA works to maintain a stable financial system. This includes overseeing banks and other financial institutions, and providing liquidity to the market when needed.
- Payments system: The RBA operates the core of Australia’s payments system, which ensures that payments can be made smoothly and efficiently.
- Banknotes: The RBA issues Australia’s banknotes.
The RBA is independent of the government, but it works closely with the government to achieve its goals. The current Governor of the RBA is Michele Bullock.