Essential

Reserve Bank of Australia (RBA)

Australia's central bank responsible for monetary policy, currency stability, and the Australian Dollar.

Definition

The Reserve Bank of Australia (RBA) is Australia's central bank, established in 1960 and wholly owned by the Australian government. It sets the official cash rate, maintains price stability with an inflation target of 2-3%, and supports full employment. RBA decisions directly impact AUD currency pairs.

How It Works

  • Sets the official cash rate (interest rate)
  • Inflation target: 2-3% per year
  • Meets 8 times per year (first Tuesday, except January)
  • Governor: Michele Bullock (since September 2023)
  • Board: Governor, Deputy Governor, Treasury Secretary + 6 external members

Types of Reserve Bank of Australia (RBA)

Rate Decision

Raise, cut, or hold the cash rate

Statement on Monetary Policy

Quarterly economic outlook report

RBA Minutes

Detailed record of board discussions, released 2 weeks after meeting

Trading Tips

1

AUD/USD often volatile around RBA announcements

2

Hawkish RBA (rate hikes) = bullish AUD

3

Dovish RBA (rate cuts) = bearish AUD

4

Watch for divergence between RBA and Fed policy

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