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Reserve Bank of Australia

The Reserve Bank of Australia (RBA) came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank. The bank has the responsibility of providing services to the Government of Australia in addition to also providing services to other central banks and official institutions. It currently consists of the Payments System Board, which governs the payments system policy of the bank, and the Reserve Bank Board, which governs all other monetary and banking policies of the bank.

Articles by Reserve Bank of Australia

Payments System Board Update: May 2020 Meeting

7 days ago

At its meeting today, the Payments System Board discussed a number of issues, including:
The implications of the COVID-19 pandemic for risk management by financial market
infrastructures (FMIs). Members considered that FMIs in Australia had generally performed well in light
of the operational and financial risk management challenges presented by the pandemic. The lessons
learned from this experience will be discussed in the Bank’s 2020 assessments of FMIs.
The impact of the COVID-19 pandemic on the retail payments system. Members considered that
retail payments providers have, to date, coped well with the altered operational arrangements and other
changes induced by the pandemic. The Board will continue to monitor changes in payment behaviour

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Statement by Philip Lowe, Governor: Monetary Policy Decision

24 days ago

At its meeting today, the Board decided to maintain the current policy settings, including the targets
for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
The global economy is experiencing a severe downturn as countries seek to contain the coronavirus. Many
people have lost their jobs and a sharp rise in unemployment is occurring. At the same time, the
containment measures have reduced infection rates in a number of countries. If this continues, a
recovery in the global economy will start later this year, supported by both the large fiscal packages
and the significant easing in monetary policies.
Globally, financial markets are working more effectively than they were a month ago, although
conditions have

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Regulators Release Feedback on Financial Institutions’ Preparation for LIBOR Transition

April 8, 2020

ASIC has released feedback on responses to the ‘Dear CEO’ letter from selected major
Australian financial institutions, detailing their preparation for the end of London
Interbank Offered Rate (LIBOR) – an initiative supported by the Australian
Prudential Regulation Authority (APRA), and the Reserve Bank of Australia (RBA).

The feedback highlights the need for all institutions to plan for LIBOR transition,
the aspects to consider in transition and the importance of addressing the related
issues early. To ensure a smooth transition, it is crucial that institutions in
Australia are well-prepared.

The regulators encourage all financial and

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Statement by Philip Lowe, Governor: Monetary Policy Decision

April 7, 2020

At its meeting today, the Board reaffirmed the targets for the cash rate and the yield on 3-year
Australian government bonds of 25 basis points, as well as the other elements of the package
announced on 19 March 2020.
The coronavirus remains first and foremost a very major public health issue, but it is also having very
significant effects on economies and financial systems around the world. Many countries are expected to
experience large economic contractions as a consequence of the public health response. Large increases
in unemployment are also expected. Once the virus is contained, a recovery in the global economy is
expected, with the recovery supported by both the large fiscal packages and the significant easing in
monetary policy that

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Review of Retail Payments Regulation – Postponement

March 25, 2020

In light of the current extraordinary circumstances associated with the impact of COVID-19, the
Reserve Bank is putting on hold the Review of Retail Payments Regulation that was announced on
29 November 2019.
Whereas the Bank had previously expected that the Review would be completed by late 2020,
we now expect that it will be completed in 2021. This decision is intended to reduce the demands on
industry stakeholders at a time when they are focused on dealing with the impact of COVID-19. Bank staff
will continue to do background work on the Review as resources permit and remain available to speak with
stakeholders as required.

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Reserve Bank of Australia and US Federal Reserve Announce Swap Arrangement

March 20, 2020

The Reserve Bank of Australia and the Federal Reserve will establish a temporary reciprocal currency
arrangement (swap line) for the provision of US dollar liquidity. The Federal Reserve will also
establish temporary arrangements with the Banco Central do Brasil, the Danmarks Nationalbank, the Bank
of Korea, the Banco de Mexico, the Norges Bank, the Reserve Bank of New Zealand, the Monetary Authority
of Singapore and the Sveriges Riksbank. These arrangements are designed to help lessen strains in global
US dollar funding markets.
The Federal Reserve also has standing US dollar swap lines with the Bank of Canada, the Bank of
England, the Bank of Japan, the European Central Bank and the Swiss National Bank.
The Reserve Bank of Australia and the Federal

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Statement by Philip Lowe, Governor: Monetary Policy Decision

March 19, 2020

The coronavirus is first and foremost a public health issue, but it is also having a very major impact
on the economy and the financial system. As the virus has spread, countries have restricted the movement
of people across borders and have implemented social distancing measures, including restricting
movements within countries and within cities. The result has been major disruptions to economic activity
across the world. This is likely to remain the case for some time yet as efforts continue to contain the
virus.
Financial market volatility has been very high. Equity prices have experienced large declines.
Government bond yields have declined to historic lows. However, the functioning of major government bond
markets has been impaired,

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Statement by Philip Lowe, Governor

March 16, 2020

As Australia’s financial system adjusts to the coronavirus (COVID-19), financial
regulators and the Australian Government are working closely together to help ensure
that Australia’s financial markets continue to operate effectively and that credit
is available to households and businesses. (Refer to earlier Council of Financial Regulators’ (CFR)
press release.)
Australia’s financial system is resilient and it is well placed to deal with the
effects of the coronavirus. At the same time, trading liquidity has deteriorated in some
markets.

In response, the Reserve Bank stands ready to purchase Australian government bonds in
the secondary market to support the smooth

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Statement by Philip Lowe, Governor: Monetary Policy Decision

March 3, 2020

At its meeting today, the Board decided to lower the cash rate by 25 basis points to
0.50 per cent. The Board took this decision to support the economy as it responds to the
global coronavirus outbreak.
The coronavirus has clouded the near-term outlook for the global economy and means that global growth
in the first half of 2020 will be lower than earlier expected. Prior to the outbreak, there were signs
that the slowdown in the global economy that started in 2018 was coming to an end. It is too early to
tell how persistent the effects of the coronavirus will be and at what point the global economy will
return to an improving path. Policy measures have been announced in several countries, including China,
which will help support growth. Inflation

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ISO 20022 Migration for the Australian Payments System – Conclusions Paper

February 26, 2020

The Reserve Bank of Australia (RBA) and the Australian Payments Council (APC) today released the
ISO
20022 Migration for the Australian Payments System – Conclusions Paper. This is the final paper
in a series of three papers aimed at assisting the industry to come to an agreement on key strategic
issues regarding the adoption of the International Organization for Standardization (ISO) 20022
messaging standards.
The Issues Paper
was published in April 2019 and sought views on the migration of messaging used in
some parts of the Australian payments system to the ISO 20022 messaging standard. The
Responses and
Options Paper was published in September 2019 and provided a summary of the responses received to the
Issues Paper and put forward

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Next Generation of Banknotes: $100 Design Reveal

February 23, 2020

The Reserve Bank today revealed the design of the new $100 banknote, which is the final
denomination to be redesigned as part of the Next Generation Banknote Program. The banknote will be
released into circulation in the second half of 2020.
As with the existing banknote, the new $100 features Sir John Monash and Dame Nellie Melba.
Governor Philip Lowe said, ‘Australians should feel proud of our banknotes. They are innovative
and contain world-leading security features that keep the banknotes secure. The new $100 banknote
celebrates the contributions that two outstanding Australians – Sir John Monash and Dame Nellie Melba –
made to our society.’
Sir John Monash was an engineer, soldier and civic leader. He was a significant figure in the

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Payments System Board Update: February 2020 Meeting

February 21, 2020

At its meeting today, the Payments System Board discussed a number of issues, including:
The results of the Bank’s 2019 Consumer Payments Survey. Members noted that the decline in the
use of cash for consumer payments had continued, with households increasingly choosing to use
electronic payment methods. At the same time, cash remains widely held for precautionary purposes and
some members of the community continue to make most of their payments in cash. The main findings of the
survey will be published in the March RBA Bulletin.
The Review of Retail Payments Regulation. The Bank has received around 50 written submissions in
response to the Issues Paper published in November. Bank staff will be meeting with stakeholders over
the coming weeks

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Renewal of Bilateral Local Currency Swap Agreement With Bank of Korea

February 6, 2020

Today, the Reserve Bank of Australia renewed the bilateral local currency swap agreement with the Bank
of Korea. The initial swap agreement between the two central banks was signed in 2014 and has been
renewed for three year periods since that time. The new agreement is for a further period of three years
and can be renewed again in the future by mutual consent of both sides. The new agreement allows for the
exchange of local currencies between the two central banks of up to A$12 billion or KRW
9.6 trillion.
This agreement is designed to promote bilateral trade for the economic development of the two
countries, to enhance financial stability and for other, mutually agreed, purposes. The agreement will
ensure that trade between the two

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Statement by Philip Lowe, Governor: Monetary Policy Decision

February 4, 2020

At its meeting today, the Board decided to leave the cash rate unchanged at
0.75 per cent.
The outlook for the global economy remains reasonable. There have been signs that the slowdown in
global growth that started in 2018 is coming to an end. Global growth is expected to be a little
stronger this year and next than it was last year and inflation remains low almost everywhere. One
continuing source of uncertainty, despite recent progress, is the trade and technology dispute between
the US and China, which has affected international trade flows and investment. Another source of
uncertainty is the coronavirus, which is having a significant effect on the Chinese economy at present.
It is too early to determine how long-lasting the impact will

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Review of Retail Payments Regulation – Issues Paper

November 28, 2019

Following discussion at the November meeting of the Payments System Board, the Bank has
released an
Issues Paper as the first stage of its Review of Retail Payments Regulation,
which will take
place over the coming year. The Issues Paper discusses and seeks stakeholder views on a
number of
potential issues that could be covered by the Review, including some recommendations
made in reports by
the Productivity Commission and the Black Economy Taskforce in relation to interchange
fees, merchant
service fees and least-cost routing of dual-network debit card transactions. The Issues
Paper also
discusses surcharging and ‘no-surcharge’ rules, and issues relating to

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34th South Pacific Central Bank Governors’ Meeting

November 22, 2019

The Reserve Bank of Australia hosted Governors from South Pacific Central Banks[1] on
19–20 November in Sydney on the occasion of the 34th South Pacific Central
Bank
Governors’ Meeting[2].

Following constructive and detailed discussions, Governors agreed the following:
as a collective, to prioritise an initial focus on a regional Know Your Customer
(KYC)
framework

this framework would cover governance, technical and legal requirements in each
jurisdiction

that the International Monetary Fund would perform the Secretariat role for the KYC work program
longer term, to seek service providers to operate within the framework.
The second day of the

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Next Generation of Banknotes: $20 Enters General Circulation

October 8, 2019

From tomorrow, people will begin seeing the new $20 as it enters general
circulation.

The $20 is the fourth denomination in the new series of banknotes that have been
released as part
of an upgrade to banknote security. It follows the release of the $5, $10 and $50 banknotes
over the past three years. The new $100 banknote is expected to be released in
2020.

Governor Philip Lowe said, ‘This is a fantastic new banknote, with world-leading
security
technology and iconic imagery. Among my favourite features are the top-to-bottom window
and the
kookaburra, whose wings move up and down as you tilt the banknote. It also provides a
great opportunity
to tell

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Statement by Philip Lowe, Governor: Monetary Policy Decision

October 1, 2019

At its meeting today, the Board decided to lower the cash rate by 25 basis points to 0.75 per cent.
While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The
US–China trade and technology disputes are affecting international trade flows and investment as
businesses scale back spending plans because of the increased uncertainty. At the same time, in most
advanced economies, unemployment rates are low and wages growth has picked up, although inflation
remains low. In China, the authorities have taken further steps to support the economy, while continuing
to address risks in the financial system.
Interest rates are very low around the world and further monetary easing is widely expected, as central

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Assessment of ASX Clearing and Settlement Facilities – September 2019

September 24, 2019

The Reserve Bank today released the September
2019 Assessment of the ASX Clearing and Settlement Facilities. The Assessment concludes that
ASX’s clearing and settlement (CS) facilities ‘observed’ or ‘broadly
observed’ all relevant requirements under the Reserve Bank’s Financial
Stability Standards (FSS) as at 30 June 2019, with the exception of the standard relating to general
business risk, which was rated as ‘partly observed’ in each facility.
On balance, the Bank has concluded that the facilities have conducted their affairs in a way that
causes or promotes overall stability in the Australian financial system. However, the facilities will
need to place a high priority on addressing the recommendations related to general business risk. The

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Survey of Foreign Exchange and Derivative Markets

September 16, 2019

In April 2019, the Reserve Bank conducted a survey of activity in foreign exchange and over-the-counter
(OTC) interest rate derivatives markets in Australia. This was part of a global survey of 53 countries,
coordinated by the Bank for International Settlements (BIS). Similar surveys have been conducted every
three years since 1986.

Globally, the Australian dollar remains the fifth most traded currency, and its share of turnover was
largely unchanged at around 7 per cent. The AUD/USD remains the fourth most traded currency
pair, accounting for a similar share of global turnover as in the previous survey in April 2016.

Activity in Australia’s foreign exchange market has

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Consultation on ISO 20022 Migration for the Australian Payments System – Responses and Options Paper

September 12, 2019

The Reserve Bank of Australia (RBA) and the Australian Payments Council (APC) today released
the
ISO 20022 Migration for the Australian Payments System – Responses and
Options Paper.
This follows the
Issues Paper published earlier this year, which sought views on the
migration of messaging used in some parts of the Australian payments system to the
International Organization for Standardization (ISO) 20022 payments messaging standard.

The RBA and APC received
31 submissions to the Issues Paper, with respondents
representing a diverse range of backgrounds including Exchange Settlement Account (ESA)
holders, industry bodies, corporate organisations,

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Payments System Board Update: August 2019 Meeting

August 16, 2019

At its meeting today, the Payments System Board discussed a number of issues, including:
The New Payments Platform (NPP). The Board discussed progress by financial institutions in rolling out
NPP payments to their customers. Members remain disappointed with the progress made by some major banks
and expect their commitments to be met.
Members also discussed the response by NPP Australia (NPPA) to the
conclusions of the consultation recently conducted by the Bank and the ACCC on NPP functionality and
access. Members welcomed NPPA’s confirmation that it would publish a roadmap for delivering new
functionality and that it had already approved a compliance framework that would allow it to mandate
certain core capability requirements for NPP

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Next Generation of Banknotes: Circulation Date for the New $20 Banknote

August 9, 2019

Next Generation of Banknotes: Circulation Date for the New $20 Banknote
Governor Philip Lowe today announced the new $20 banknote will be released into general
circulation on
9 October 2019. While they will soon be shipped around the country in time for release,
as with any new
banknote it will take time for them to be widely available. Existing $20 banknotes can
continue to be
used, as all previously issued banknotes remain legal tender.

The Governor noted in his statement to the House of Representatives Standing Committee on
Economics
that the release is a big logistical exercise, with more than 170 million $20 banknotes
in circulation.
The Reserve Bank has been

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Changes to the Exchange Settlement Account Policy

July 25, 2019

The Reserve Bank has updated its Exchange Settlement
Account (ESA) Policy after determining that a number of changes were appropriate to provide more
information about the eligibility requirements and application process, including the various risk
management criteria applicants would be expected to meet.
The changes seek to ensure that the ESA Policy continues to promote competition in the market for
payment services by providing access to ESAs for non-ADI entities whose applications are successful,
while also ensuring that operational, liquidity and other risks are appropriately managed.
Some of the changes have been motivated by developments in technology that have allowed a wider range
of non-ADI entities (including ‘fintechs’) to compete directly

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New Payments Platform: Conclusions Paper

June 13, 2019

The Reserve Bank today released a report on the functionality of, and access to, the
New Payments Platform. The report presents 13 recommendations from the public
consultation that the Bank has undertaken with input and assistance from the
Australian Competition and Consumer Commission (ACCC). The recommendations, if fully
implemented by NPP Australia (NPPA) and its participants, should address the issues
and policy concerns identified during the consultation.

The report’s overall conclusion is that the NPP is enabling payments functionality
that largely addresses the gaps identified in the Reserve Bank’s 2010–2012 Strategic
Review of Innovation. However, it highlights

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Reserve Bank Adjusts the Committed Liquidity Facility

June 6, 2019

Following a review, the Reserve Bank has assessed that Authorised Deposit-taking Institutions (ADIs)
using the Committed Liquidity Facility (CLF) can increase their holdings of high quality liquid assets
(HQLA) from 25 to 30 per cent of the stock of HQLA securities. This change is possible because
the volume of HQLA securities has risen over recent years. To minimise the effect on market functioning,
the increase will occur at a pace of 1 percentage point per year until 2024, commencing with an
increase to 26 per cent in 2020.
The Reserve Bank has also assessed that the CLF fee should be increased from 15 to 20 basis points
per annum on the size of the commitment to each ADI. The fee is set so ADIs face similar financial
incentives to meet their

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The Operation of the Interchange Standards: Conclusions and Variation of Standards

May 31, 2019

After consultation with industry, the Reserve Bank has decided to implement the proposals it put
forward in February to vary Standards No 1 and No 2
of 2016 to improve the clarity and operation of the net compensation requirements of the Standards.
The Bank will also implement its proposed transitional arrangement to the varied Standards.
The Standards limit interchange fees in designated card payment systems. The net compensation
requirements were introduced in 2016 and are designed to prevent circumvention of the limits on
interchange fees by arrangements involving non-interchange payments or other incentives being provided
by schemes to issuers.
The variations that will give effect to the proposals have been modified relative to those set out in

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Payments System Board Update: May 2019 Meeting

May 24, 2019

At its meeting on Friday 24 May 2019, the Payments System Board discussed a number of
issues, including:

Least-cost routing of debit card transactions. The Board has been supportive of dual-network debit
cards because they provide convenience and choice to both consumers and merchants and can help hold down
payment costs. Reports from the Productivity Commission, the Black Economy Taskforce and the House of
Representatives Standing Committee on Economics have all called for the industry to provide least-cost
(or merchant choice) routing for contactless transactions to their merchant customers. A number of
financial institutions, including two of the major banks, are now making this functionality available.

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Regulators Urge Financial Institutions to Plan for LIBOR Transition

May 9, 2019

The Australian Securities and Investments Commission (ASIC) has written to the CEOs
of several major Australian financial institutions regarding their preparations for
the end of LIBOR. This initiative is strongly supported by the Australian Prudential
Regulation Authority (APRA) and the Reserve Bank of Australia (RBA).

LIBOR (London Interbank Offered Rate) is deeply embedded in financial markets
globally and is used by many Australian financial institutions in their contracts
and business processes. The UK Financial Conduct Authority (FCA) has stated that it
will no longer use its powers to sustain LIBOR beyond 2021.

The purpose of the

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Financial Markets Foundation for Children Provides Funding for New Chair in Neonatal Paediatrics

April 24, 2019

The Financial Markets Foundation for Children (FMFC) has provided funding for the appointment of a new
Chair in Neonatal Paediatrics with responsibility for rapidly advancing knowledge and practice in the
field of newborn health and improving life outcomes for babies.
As a full Professor of Monash University, the new appointee will be responsible for leadership and
strategic development of neonatal paediatric academic research at the University. The appointee will be
a well-established academic neonatologist from one of the world’s leading research
communities.
Chair of the Financial Markets Foundation, Reserve Bank Governor Philip Lowe, said, ‘On behalf
of the FMFC, we are delighted to provide funding for

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