Wednesday, April 17, 2024

Reserve Bank of Australia (RBA)

The Reserve Bank of Australia (RBA) is the central bank of Australia.

It sets monetary policy, works to maintain a strong financial system, and issues the national currency.

Its role is to contribute to monetary stability, full employment and the economic prosperity and welfare of the Australian people.

It achieves this goal by conducting monetary policy to achieve the agreed inflation target, working to maintain a strong financial system and an efficient payments system, and issuing national banknotes.

The Reserve Bank of Australia provides certain banking services to the Australian Government and its agencies and to some overseas central banks and official agencies upon request.

Additionally, it manages Australia’s gold and foreign exchange reserves.

RBA

In 1911, legislation established the “Commonwealth Bank of Australiaa”. In 1959, this original body corporate was retained in legislation as the Reserve Bank of Australia (RBA), solely to carry out central bank functions.

Commercial and savings banking functions were transferred to the new institution, retaining the old name “Commonwealth Bank of Australia”.

RBA Governance

The Reserve Bank of Australia is an independent central bank responsible for monetary, financial system and payments system policies and other financial matters.

The bank has two boards of directors:

  1. Reserve Bank Committee, responsible for monetary policy and financial stability and central bank policy on matters other than payments system policy.
  2. Payment Systems Committee, responsible for matters related to payment system policies.

Reserve Bank Board of Directors

Monetary policy decisions are made by the Reserve Bank Board with the aim of achieving low and stable inflation over the medium term.

The Reserve Bank Board is responsible for the Bank’s monetary and banking policies, as well as the Bank’s policies on all other matters (except payments system policy).

The governor responsible for managing the Reserve Bank is the Chairman of the Reserve Bank’s Board of Directors. The deputy governor is the vice-president.

Payment System Board

The

Payment Systems Committee is responsible for Payment System Policy.

The Governor also serves as Chairman of the Payment Systems Committee. The Assistant Governor (Financial Systems) serves as Deputy Chairman.

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