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Date Published : Friday, February 01, 2008
The Reserve Bank of Australia (RBA) is the central financial institution in Australia. A policy-setting organisation, it is also responsible for providing financial services to federal government and other overseas institutions, according to the bank's website.
In a similar vein to the Bank of England in the UK, the Reserve Bank of Australia is responsible for the country's monetary policy. Each month (excluding January), the reserve bank board meets on the first Tuesday to discuss the rate of interest, as it will next week.
Currently, the cash rate stands at 6.75 per cent, the highest rate since 1996, following a 25-basis point rise in November last year. With February's meeting and decision the first of the new year, some are expecting a further increase to seven per cent.
In addition to the cash rate, monetary policy also covers inflation, which is again the concern of the Reserve Bank of Australia.
The Consumer Price Index (CPI) is the barometer used by the reserve bank board, with inflation currently standing at three per cent, on the edges of the two to three per cent target set by the governor, Glenn Stevens, and the treasurer.
The Reserve Bank of Australia plays an important role in the lives of Australians and their personal finances.
With the cash rate impacting the cost of borrowing through loans and the returns gained through savings, February's decision - which could see the interest rate rise further according to The Age - will affect the finances of the whole country.
Australian savings accounts compared and reviewed.
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