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Domestic Market Operations and Liquidity Forecasting

Author

Listed:
  • Alexandra Baker

    (Reserve Bank of Australia)

  • David Jacobs

    (Reserve Bank of Australia)

Abstract

The stance of monetary policy in Australia is set in terms of a target for the cash rate. To keep the cash rate at the policy target, the Reserve Bank sets the supply of Exchange Settlement (ES) balances at a level consistent with demand. The level of ES balances changes when entities in the private banking system transact with the Reserve Bank and its clients, particularly the Australian Government. These changes need to be accurately forecast, so that they can be counterbalanced by the Reserve Bank's domestic market operations.

Suggested Citation

  • Alexandra Baker & David Jacobs, 2010. "Domestic Market Operations and Liquidity Forecasting," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 37-44, December.
    • Handle: RePEc:rba:rbabul:dec2010-05
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2010/dec/pdf/bu-1210-5.pdf
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    References listed on IDEAS

    as
    1. Peter Gallagher & Jon Gauntlett & David Sunner, 2010. "Real-time Gross Settlement in Australia," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 61-69, September.
    Full references (including those not matched with items on IDEAS)

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