Monetary policy Simulator
The RBA manipulates the interest rate in the short term money market to achieve its target cash rate. The manipulation is done by buying, or selling Commonwealth government securities to the banks to affect the amount of cash they supply to the short term money market.


RBA action



Interest rate:



Buying securities puts cash in
the hands of the banks,
increasing supply.

Selling securities takes money
from the banks,
decreasing supply.