The Reserve Bank Of Australia (RBA) Is The Central Bank And Money Issuer Of The Commonwealth Of Australia. It Was Established On 14 January 1960 And Inherited The Functions Of The Commonwealth Bank Of Australia As The Central Bank Through The Reserve Bank Act 1959. Its Headquarters Are Currently Located In Martin Place, Sydney, New South Wales, Australia.
History
Mid-19th Century To 1925
The Call For A National Bank In Australia Dates Back To The Mid-19th Century And Gradually Increased In The 1890s, But The Commonwealth Bank Of Australia Was Not Established Until 1911, After The Establishment Of The Commonwealth Of Australia In 1901, But The Commonwealth Bank Cannot Issue Money: This Responsibility Is Still Held By The Treasury. After World War I, Then-Governor John Garvan Oversaw A Series Of Colossal Mistakes To Compress The Money Supply, Bringing Australian Money Back To The Gold Standard System, Which Was Established At The Same Time As The Pound In 1925. During The Subsequent Great Depression, The Australian Pound Experienced A Devaluation And A Derailment Of Its Value From The Pound, So It Broke Off The Gold Standard System Through The Commonwealth Banking Act 1932.
1925 To Present
In 1945 Federal Legislation Began To Regulate Private Banks By The Commonwealth Bank, But In 1949 H.C. Coombs, Who Opposed This Move, Became President And Delegated Overall Control Of Private Banks To The Banks. Combs Also Recommended That The Monetary Regulator Ease Interest Rate Controls So That The Commonwealth Bank Could Implement Policy More Through Open Market Operations. In 1959, The Government Legislated To Divest The Federal Bank Of Its Central Bank Responsibilities And Established The Reserve Bank As The New Central Bank The Following Year. In 1966, The Reserve Bank Presided Over The Issuance Of Decimal Australian Dollars, Replacing The Australian Pound.
In 1980, The Government's Short-term Bond Issuance Was Changed From A "tap System" Of Pricing To A Bidding System (that Is, A Designated Amount Of Bonds, And The Price Is Determined By The Market). Soon After, This System Was Also Used To Issue Long-term Bonds. In 1983, As Australia's Financial System Supervision System Began To Be Liberalized, The Australian Dollar Exchange Rate Was Also Reformed To A Floating Exchange Rate In The Same Year. In 1998, The Banking Supervision Function Of The Reserve Bank Was Stripped Away And Transferred To The Australian Prudential Regulation Authority, The Same Year The Payments System Board Was Established.
The Current Governor Of The Reserve Bank Is Philip Lowe, Who Succeeded Glenn Stevens As President On September 18, 2016. After Lowe's Term Expires On September 17, 2023, Deputy Governor Michele Bullock Will Take Over As President. Bullock Will Become The First Female Governor Of The Reserve Bank Of Australia.
Reserve Bank Of Australia
Roles And Responsibilities
The Reserve Bank Of Australia Has The Responsibility To Serve The Australian Government, As Well As Other Central Banks And Official Institutions. Its Policy-making Departments Are The Payment System Board Of Directors, Which Is Responsible For Payment System Policy, And The Reserve Bank Board Of Directors, Which Is Responsible For Other Monetary And Banking Policies. Members Of Both Boards Include Bank Officials, Treasury Officials, Other Federal Government Officials, And Other Heads Of Agencies In The Economic Structure. The Structure Of The Reserve Bank Board Of Directors Has Not Changed Significantly Since 1951, Before The Establishment Of The Reserve Bank, Except For The Number Of People. The Reserve Bank President Is Appointed By The Minister Of Finance And Chairs Both The Policy Payment System Board And The Reserve Bank Board Of Directors. If There Is A Conflict Between The Opinions Of The Two Boards Of Directors, It Will Be Resolved By The Governor.
Policy Rate
The Reserve Bank Of Australia Uses The Cash Rate Target As The Policy Rate.
On June 18, 2024, The Reserve Bank Of Australia Maintained The Cash Rate Unchanged At 4.35% For The Fifth Consecutive Meeting. Against The Backdrop Of Divergent Global Policy Outlook, The Reserve Bank Of Australia's Cautious Stance Puts It In A Hawkish Position.
