RBA's Jacobs: Transition from RBA controlling reserves quantity to banking system managing it
Reserve Bank of Australia (RBA) Head of Domestic Markets, David Jacobs, said during the Asian trading session on Tuesday that the central bank aims to have a system that can flexibly supply whatever quantity the banking system demands, while keeping the cash rate close to the board’s target.
Additional remarks
As reserves become more demand-driven, active liquidity management will become more important for financial institutions.
Road to ample is a transition from a system in which the RBA determines the quantity of reserves to one in which the banking system does.
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