This article is about the monetary policy conducted by the Reserve Bank of Australia (RBA). It concentrates on open market operations which are presented in the light of banking system liquidity. The goals and strategy of monetary policy are described as well as the O/N market rate controlled by the RBA. Then -factors determining the banks' demand on liquidity (cash) and factors determining the supply of liquidity are discussed. One specific role of the reserve requirement (non-negative obligation) is underscored. Sources of cash and open market operations procedures conducted every day are presented. The relations between the banks' liquidity forecasting and open market operations's values as well as open market operations's maturities are shown. The RBA's currency transactions are also discussed. The last part shows the way in which the minimum bid rate accepted by the RBA is calculated and describes securities used as collateral in open market operations.

Keywords: monetary policy in Australia, open market operations, liquidity of the banking system, O/N, reference rate, overnight.

  Gracjan Pietrzyk, Open Market Operations in Australia - plik pdf; (133 KB)