Cracking the facts
What is the RBA?
What is the Reserve Bank of Australia (RBA) and what are its main functions?
What is the RBA?
What is the Reserve Bank of Australia (RBA) and what are its main functions?
What is the RBA?
The RBA is Australia’s central bank. Unlike commercial banks, the central bank does not provide bank accounts or loans to the public. Its duty is to contribute to the stability of the currency, full employment and the economic growth of the country.
So, how does the RBA carry out its mandate? The primary role of the central bank is to control inflation at a rate of between 2 and 3 percent annually. The regulator does this by setting the official interest rate for Australia, which is called the cash rate. This rate influences the interest rates on savings and loans, and ensures that prices for goods and services don’t rise too quickly.
When setting the country’s cash rate, the RBA looks at all aspects of the economy. For example, when it wants to stimulate spending, it lowers the interest rate. When we are spending too freely, it hikes the cash rate.
The Reserve Bank serves as the banker for the government, processing millions of payments on behalf of government agencies and institutions. The RBA also keeps a close eye on Australia’s financial system, ensuring that it is healthy and stable so that your money is safe. It regulates payment systems to ensure that they are secure and working efficiently. The RBA does all these things to help protect and support the economic welfare of all Australians.
What is the RBA?
Whether you are saving up for retirement, taking out a loan or investing in assets to build wealth, RBA’s monetary decisions play an important role in the country’s financial sector.
Explore nestegg if you want to be up to date with the latest information and news about the Reserve Bank.
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