本篇essay代写-澳大利亚的货币政策及其有效性讲了有人指出,澳大利亚政府或澳大利亚储备银行有很大的降息空间。近年来,澳洲央行下调了现金利率,这意味着市场利率也将进一步走低。这种情况将导致消费者或公众增加支出。这种情况或头寸的现金利率或利率根本不促进储蓄。在当前的货币政策形势下,澳洲联储的融资成本偏高,现金利率偏低。因此,融资成本与现金率之间存在着巨大的差异,导致储蓄水平降低,购买力提高。基于低储蓄的现状,澳大利亚的货币政策需要改变。因此,澳大利亚的货币政策效果较差。本篇essay代写文章由新西兰第一论文 Assignment First辅导网整理,供大家参考阅读。

  Monetary Policy of Australia and Its Effectiveness

  It has been noted that Australian government or Reserve bank of Australia has lots of scope of lowering interest rate. In recent times, RBA has lowered its cash rate which means interest rate in the market will also get lower down. This situation will lead towards more spending by the consumers or public at large. This situation or position of cash rate or interest rate does not promote savings at all. In present situation of monetary policy, RBA has taken funding cost at higher side and its cash rate is at lower side. Therefore, there is huge difference between funding cost and cash rate which leads to lower the saving level and higher purchasing power. On the basis of low saving situation, monetary policy of Australia requires changes. Therefore, monetary policy of Australia is less effective (Akhtar, 2014).

  At this level of economy, financial market has been in effective function as funding cost of banks has been at a decline rate. Since funding cost of bank is at lower side, therefore, they are available with more funds that they can land as loan. At the level of present cash rate (1.50 percent) decline in business investments and other investments can be observed. This is because cash rate and interest rate tends to be parallel and therefore the rate of return on business and other investments will be decline rate. It has been observed that because of decrease in cash rate there has been decrease in housing sector sin terms of lending. On the other hand, prises of dwelling have been increased. Since inflation is at a moderate level when cash rate is 1.75 percent but when cash rate is decline to 1.50 percent then it will increase inflation (Valadkhani et al., 2014). Therefore, it is suggested that the cash rate shall be increased from the present level (1.50 percent to 1.75 present).

  Appropriate Level of Cash Rate

  Reserve Bank of Australia is responsible for setting appropriate level of cash rate, interest rate, gearing level of savings, purchase and sale of bonds and other government securities. All these factors are components of inflation rate prevailing in the market. Therefore, it becomes tools for Reserve Bank of Australia to manage inflation rate while increasing and decreasing in rates. Most crucial and direct tool that makes impact on almost every aspect of inflation rate is cash rate. Cash rate is the rate which is charged by bank from another bank for its settlement transactions (Valadkhani et al., 2014). It can be noted that there is a direct relationship between cash rate and interest rate because both rates impact supply of money in market. This has imposed liability on the reserve bank officials to take decisions related to increase or decrease the cash rate of banks and make monetary policy more stable.