1. Reserve Bank of Australia Primary purpose is the overall management of the financial sector in accordance with the economic objectives of the Commonwealth Government. Created in 1959 under the Reserve Bank Act 1959

2. Three broad objectives Stability of Australia’s currency Maintenance of full employment Economic prosperity and welfare of the people of Australia

3. Conducting monetary policy (on behalf of Big Kev!...and his friends) Monetary Policy is most important ongoing responsibility Monetary Policy is Reserve Bank action designed to influence the cost and availability of money in the Australian economy through influencing general level of interest rates

4. Cash Rate and Money Supply Cash Rate D S

5. Cash Rate and Money Supply Cash Rate D S  Cash rate >  Money Supply

6. Control of Note Issue Sole issuing authority All currency is manufactured by a division of the RBA known as Note Printing Australia Volume of physical currency varies depending on the time of year (eg more at Christmas)

7. Regulation of the Payments System Ensuring the efficiency and stability of the payment methods such as credit cards, electronic cash, traveller’s cheques and stored-value cards

8. Banker to the Banks Holds exchange accounts between banks to settle debts between them Used by banks to buy and sell Government securities

9. Holds Australia’s reserves of gold and foreign currency Provides funds that can be used to make international payments or RBA functions with the foreign exchange market Overseas dealers in the foreign exchange market

10. Banker and Advisor to Govt Provides banking and financial agency services to the Comm Govt & some state govts. Govt can lodge funds with the RBA through the issue of Treasury Bills – which leads to the RBA printing the currency it needs