01 May Question: You are representing the RBA and noted that the cash rate is higher than the RBA target cash rate…
You are representing the RBA and noted that the cash rate is higher than the RBA target cash rate.
– The RBA should advise the banks to lend to each other at the agreed target cash rate.
– There is nothing that the RBA can do about this situation because the central bank is independent of the government.
-The RBA should sell bonds and thereby push more ESF into the banking system to reduce the pressure in the interbank market.
-The RBA should buy bonds and thereby push more ESF into the banking system to reduce the pressure in the interbank market.
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