Reserve Bank of Australia
The Reserve Bank of Australia's (RBA) main responsibility is monetary policy.
Policy decisions are made by the Reserve Bank Board, with the objective of
achieving low and stable inflation over the medium term.
The Reserve Bank of Australia is the institution responsible for managing
Australian currency policies. The Reserve Bank was founded in 1911, but achieved
its present form in 1960 when the bank’s function shifted toward regulation and
away from commercial banking.
The Reserve Bank of Australia, like many central banks, has the power to
increase or decrease the money supply in Australia. Unlike the US Federal
Reserve, the Reserve Bank of Australia prints and destroys money directly,
rather than working with other government institutions. The Reserve Bank also
buys and sells treasury bonds to primary traders, which raises money for
government operations as well as pumping money into the economy (or removing an
excess of money) at critical junctures. The Reserve Bank also has the power to
regulate nationwide interest rates, as well as to adjust the asset holdings of
individual commercial banks, meaning that this Reserve Bank plays a heavy role
in Australian financial affairs.
The Reserve Bank of Australia also publishes a number of reports on both a
monthly and an annual basis. Traders in the Australian currency market consider
these reports extremely accurate and useful in developing an idea of the state
of the Australian economy at any point in time.
Since trade balances depend on a nation’s money supply, the Reserve Bank of
Australia’s actions play a large role in determining the behavior of the
Australian currency market, a fact which many foreign exchange traders take
advantage of by closely watching the Reserve Bank’s actions and taking
appropriate actions.
Visit Bank of Australia Official Website
