Most would assume that the Reserve Bank of Australia’s (RBA) role is to announce the official cash rates. This is most certainly public knowledge where they announce it on the first Tuesday of 11 months of the year. However you’d be surprised how much responsibility the RBA has on our economy.
The Reserve Bank of Australia (RBA) is Australia’s central bank and derives its functions and powers from the Reserve Bank Act 1959.
What does the Reserve Bank of Australia do?
The RBA conducts the nation’s monetary policy and issues our currency. It seeks to foster financial system stability and promote the safety & efficiency of Australia’s payments system. The monetary policy is what central banks do to protect and guide their economies.
The RBA is responsible for designing, printing, issuing, circulating and destroying Australian bank notes. It actually has no control over the use of our nations coins.
The RBA carefully monitors the nations payments system. Did you know that the RBA administers the computer technology system that our banks and institutions use to transfer funds between different banks?
The RBA is also used as a traditional bank. It is actually the government’s banker. If the government owes you money such as a tax refund take a look next time at the cheque!
It also manages our nations inflation which is a major influence on our monetary policy. In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. The inflation targets are set by the RBA and influence the monetary policy.
Fun fact – The RBA was the first currency issuer in the world to issue plastic notes.
From our perspective, we have great respect for the Reserve Bank. It’s roles and responsibilities are extraordinary. Their decisions contribute to the financial success of Australia and within our own households.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
July 2019
