Reserve Bank of Australia meeting

Find out about the Reserve Bank of Australia (RBA) meeting and statement – including how the bank sets the cash rate, why it’s important for traders and its effect on the Australian economy. You can also find the 2018 and 2019 RBA meeting dates here.

What is the RBA monetary policy meeting?

The RBA’s monetary policy meeting is a board meeting held 11 times a year to discuss and set the ‘cash rate’ – Australia’s benchmark interest rate. The cash rate affects the cost of borrowing for banks, which influences the interest rates they charge to consumers and businesses. This, in turn, affects how these stakeholders borrow and spend money, which can ultimately lead to a change in inflation.

The RBA cash rate is currently 1.5% and has remained unchanged since August 2016.

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When is the next RBA interest rate announcement?

The next RBA interest rate announcement is scheduled for 2.30pm on 5 March 2019, following the Reserve Bank board’s monetary policy meeting.

See a full calendar of upcoming Reserve Bank of Australia monetary policy meetings.

How does the RBA meeting statement affect traders?

The RBA meeting statement affects traders because it sets the official interest rate in Australia – the cash rate. In turn, the cash rate affects the overall stability of the financial system, including borrowing costs, rates of return and currency values. That is why, when an RBA meeting takes place, the market can become slightly more volatile for a short period.

The cash rate is defined as the official interest rate at which banks borrow money from other banks on an overnight basis. However, it also influences rates set by commercial banks and other lenders, which affects spending and borrowing, and – eventually – inflation. This causes a ripple effect across the Australian economy, including the demand for bonds, stocks, currency and other securities. The meeting statement is important to traders because they can come up with their trading strategy and make decisions based on the most recent rate changes. Many traders keep informed about RBA meeting dates and statement releases to identify opportunities and minimise their trading risk.

How does the RBA set the cash rate?

The RBA sets the cash rate with the aim of achieving ‘monetary stability’, which it defines as an inflation rate of 2-3% per annum. It must take many current economic factors into consideration to set the most appropriate cash rate.

If the RBA wants to lower inflation, it will increase the cash rate. If it wants to boost economic activity, it will lower the cash rate. Another important consideration is the fluctuation of the AUD exchange rate. If the AUD falls against other currencies, export prices will fall, which can lead to higher inflation and a lower cash rate. To support economic growth and activity, the RBA must keep inflation and, ultimately, the cash rate in a healthy band.