What is the Reserve Bank of Australia?
The Reserve Bank of Australia, or RBA, is Australia's central bank. It sets the official cash rate, manages monetary policy to keep inflation low and stable, and issues Australia's banknotes.
The RBA was established in 1960, taking over central banking functions from the Commonwealth Bank. Its headquarters are in Martin Place, Sydney.
The bank aims to keep inflation between 2 and 3 percent, while also supporting full employment and the economic prosperity of Australians.
Setting the cash rate
The cash rate influences interest rates on home loans, savings accounts and business loans. When inflation is too high, the RBA may raise the cash rate. When the economy needs support, it may lower it.
Decisions on the cash rate are made at regular meetings and closely watched by homeowners, businesses and financial markets.
The RBA also oversees the payments system, holds Australia's foreign currency reserves and works to maintain financial stability. Its banknotes are produced by Note Printing Australia, a subsidiary. In 2025, a new Monetary Policy Board began making interest rate decisions.