The Cash Market in Australia

Bob Rankin
Additional contact information
Bob Rankin: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: The cash market is the market for overnight loans between financial institutions. This market is central to the operation of Australia’s financial system: it is there that banks seek to borrow or lend in response to short-term fluctuations in their liquidity, and where the Reserve Bank conducts the domestic market operations through which it controls monetary conditions and implements monetary policy changes. This paper outlines a model of the cash market in Australia, which incorporates recent changes in the operating procedures followed by the Reserve Bank. The paper shows how the dynamics of the cash market depend on the presence of both same-day and next-day settlement in the cash market, and how the various interest rates on overnight loans (“cash rates”) are determined.

Date: 1992-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/1992/pdf/rdp9214.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp9214

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew ().