Australia's Monetary Policy Challenges
Added on 2020-02-19
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MACROECONOMICS 1The current monetary policy stance of the Reserve Bank of AustraliaStudent’s NameCourse IDUniversityDate
MACROECONOMICS 2Executive summaryThe Australian Monetary Policy stance governed by the Reserve Bank of Australia has played a major role in maintaining significant monetary supply and demand, price stability of commodities, credit control, and develops a suitable interest rate framework. In the last minute ofthe RBA Monetary Policy, the central bank of Australia kept the benchmark cash rate at 1.5 percent. In the monetary policy statement, the RBA has also clarified that the falling strength in the Australian dollar can create an adverse impact on inflation and economic growth status. Additionally, the fall in the interest rate has resulted in an increase in the flow of money that further led to an increase in the inflation rate. However, it is forecasted by several economists that the RBA will increase in the interest rate to 3.5 percent in the future in order to maintain a balance in the economy.
MACROECONOMICS 3Table of ContentsIntroduction......................................................................................................................................4Previous Research............................................................................................................................4Current Monetary Policy of the Reserve Bank of Australia............................................................6Data Analysis...................................................................................................................................7Future Projection...........................................................................................................................10Conclusion.....................................................................................................................................11References......................................................................................................................................12
MACROECONOMICS 4IntroductionThe study describes the current Australian Monetary Policy and its impact on inflation,exchange rate, and economic growth as well as the industrial growth of the nation. The ReserveBank of Australia (RBA), the central bank of the nation has been accountable for the monetarypolicy stance in Australia. The study identifies the previous research conducted by theeconomists and the scholars on the monetary policy of the nation to find out how the policy hascontributed towards the several economic aspects such as interest rate, price stability, inflation,and debt management, etc (Tuan, 2012). In the research study, the existing monetary policy ofthe RBA has been discussed thoroughly so that the role, as well as the long-term effect of thepolicy measure, can be evaluated. Precisely, in the data analysis segment, the impact of themonetary policy stance on several economic indicators has been analysed as well. To finish, thefuture projection of the monetary policy of the RBA has been proposed. Previous ResearchIn terms of previous research done on the subject of monetary policy, a review of theresearch of Manalo, Perera, and Rees (2014) can be presented. According to the research studyof the trio, Australian monetary policy has subsequently contributed to control the swings in theexchange rate. By considering the theoretical concept, exchange rate movement has been themajor contributor towards price fluctuation of domestic as well as international products andservices as relative prices have been fluctuated due to change in the exchange rates as shown infigure 1.
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