As the COVID cash glut comes to an end, the Reserve Bank is changing the way it sets and maintains interest rates
- Written by Isaac Gross, Lecturer in Economics, Monash University
Every six weeks, the Reserve Bank of Australia sets the “cash rate”, affecting the interest rates paid on every Australian mortgage and savings account.
Like any price mechanism, the cost of borrowing money is determined by supply and demand – how much cash is in the banking system, and how much has been borrowed at any one time....
