Role of the RBA
Unemployment rate remaining at a level which allows for economic growth without placing excessive inflationary pressures on the economy.
What is the maintenance of full employment?
The accounts banks hold with the RBA
What are exchange settlement accounts?
Cash rate target below 3%
What is an expansionary stance?
Channel which impacts consumers with existing loans
What is the cash flow channel?
MP is independent and not bound by political constraints
What is one strength of MP?
The range formed by the RBA's lending rate (ceiling) and deposit rate (floor)
What is the interest rate corridor?
Channel which impacts owners of items such as property
What is the asset prices and wealth channel?
Maintaining inflation between 2-3% on average, over time.
What is stability of the currency?
What is forward guidance?
Current stance of MP
What is a contractionary stance?
Change which occurs to the AUD when the cash rate target is increased
What is an appreciation of the AUD?
What is an impact lag?
The intersection between supply of cash from the RBA and demand by banks
What is the actual cash rate?
Decrease in savings and increase in spending
What is the impact of a lower cash rate target on the savings and investment channel?
Strong and sustainable economic growth that allows for real income growth to support households' lifestyles.
What is the economic prosperity and welfare of the Australian people?
"The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome"
What is the stance of the RBA from the June 2024 statement?
Stance when the RBA increases the cash rate from 0.1% to 2.5% in 6 months
What is a less accomodate / expansionary stance?
Change that occurs AD in the US when the Australian cash rate target increases
What is an increase in the level of AD
Ability to slow growth in the CPI due to monthly meetings
What is the one strength of MP to achieve low inflation?