The Reserve Bank of Australia (RBA) is Australia’s central bank.
It conducts monetary policy, works to maintain a strong financial system, and issues the nation’s currency.
Its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.
It does this by conducting monetary policy to meet an agreed-upon inflation target, working to maintain a strong financial system and efficient payments system, and issuing the nation’s banknotes.
The RBA provides certain banking services as required to the Australian Government and its agencies, and to a number of overseas central banks and official institutions.
Additionally, it manages Australia’s gold and foreign exchange reserves.
In 1911, legislation established the “Commonwealth Bank of Australia”. In 1959, this original body corporate was preserved as the Reserve Bank of Australia (RBA) in legislation, specifically to carry on the central banking functions.
The commercial and savings banking functions were transferred into a new institution, which carried on the old name of “Commonwealth Bank of Australia”.
RBA Governance
The Reserve Bank of Australia is an independent central bank with responsibility for the monetary, financial system and payments system policies, and other financial matters.
The Bank has two boards:
- Reserve Bank Board, which has responsibility for monetary policy and financial stability and the Bank’s policy on other matters excluding payments system policy.
- Payments System Board, which has responsibility for matters relating to payments system policy.
Reserve Bank Board
Monetary policy decisions are made by the Reserve Bank Board, with the objective of achieving low and stable inflation over the medium term.
The Reserve Bank Board is responsible for the Bank’s monetary and banking policy, and the Bank’s policy on all other matters, except for its payments system policy.
The Governor, who is responsible for managing the Reserve Bank, is Chair of the Reserve Bank Board. The Deputy Governor is Deputy Chair.
Payments System Board
The Payments System Board is responsible for the payments system policy.
The Governor is also Chair of the Payments System Board. The Assistant Governor (Financial System) is the Deputy Chair.