How the Reserve Bank of Australia Impacts Interest Rates? The Reserve Bank of Australia (RBA) is the central bank of our country and is responsible for making decisions that impact interest rates and the housing market. In this blog post, we will discuss what the RBA does and how their decisions can affect your finances. We will also take a look at some of the recent changes that have been made by the RBA and what they could mean for you. 

What Is The RBA?

The Reserve Bank of Australia is responsible for making decisions about the official cash rate, which is used as a benchmark for other interest rates. This includes mortgage and credit card interest rates, among others. When the RBA lowers the cash rate, it leads to a decrease in interest rates across the board. Similarly, when they raise it, we can expect an increase in most interest rates. In this way, the Reserve Bank has an immense impact on many aspects of our personal finances. 

Changes In Monetary Policy

In recent years there have been some notable changes made by the RBA with regard to monetary policy and interest rates. At the start of 2020, they lowered their target cash rate to 0.75%. This was done in response to concerns over the pandemic and its effects on the economy. It was hoped that this move would help to stimulate economic activity and provide some financial relief for Australians affected by the crisis.