What it measures
The cash rate is the interest rate on overnight loans between banks in the money market. The Monetary Policy Board sets a target for it, and the RBA keeps the actual rate close to that target.
Who publishes it and when
The Board meets eight times a year. The decision and its statement are published at 14:30 Sydney time, and the Governor holds a press conference afterwards. The Statement on Monetary Policy, with forecasts, is published four times a year.
How it is put together
The Monetary Policy Board aims to keep inflation in the 2 to 3 per cent range while supporting full employment. Its decisions draw on inflation, the labour market and conditions abroad.
What traders watch
Traders compare the decision with expectations and read the statement and the press conference for the Board's view on inflation and jobs. The monthly CPI and the monthly labour force figures from the ABS are watched closely in the weeks before.
How markets have usually reacted
A rise or a firmer tone has often lifted the Australian dollar; a cut or a softer tone has often weakened it. Because the Australian dollar also moves with global markets, a surprise can be overshadowed on a day when risk appetite is moving strongly.
Common mistakes
- Reacting to the rate alone. When the decision itself is expected, the statement, the vote and the press conference usually decide the move.
- Trading the first seconds: spreads widen and prices can jump in both directions before settling.
- Forgetting the press conference: it starts after the statement and can move the market a second time.
How a higher or lower figure is usually read
A rate rise is usually read as supportive for the Australian dollar and a cut as negative. When no change is expected, the statement matters most. Not a signal.
Release history
No past releases recorded yet.
Related news
- Australia Quarterly CPI
- Australia Employment Change
- Australia Unemployment Rate
- Reserve Bank of New Zealand Rate Decision (OCR)
- Economic calendar: every release this week in your time zone
- Lot size calculator: keep your risk the same around news
- How to use an economic calendar: what happens around a release, and how to plan for it
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Official source
Source: Reserve Bank of Australia. Cash rate data is published free of charge at rba.gov.au.
Published by Reserve Bank of Australia (RBA), Monetary Policy Board: www.rba.gov.au