How does the RBA actually change the cash rate? (Monetary Policy Series 2020, Part Three)

[@evinlee7751]

You are indeed the goat of teaching economics

[@mrsymonds]

That's high praise. I'll take it tho. Thanks for watching

[@Zar0a]

Such a great video simplifying and explaining the RBA cash rate policy! Loved it

[@preyaanray8418]

Hello mate. I'm so glad to see someones making videos to explain macroeconomics in the context of the Australian economic which is pretty unique on its own. This information really helped me understand the concepts I'm studying in ny Econ course at Newcastle.

[@mrsymonds]

Hey Preyaan -- thanks for taking the time to comment. I really appreciate it. Let me know if there are other concepts, etc that would be valuable to explore. Cheers for watching

[@ethanfong4331]

Great video Mr Symonds. Your video clears up what the RBA does to set the cash rate. But what about Money Supply? I thought that money supply determined interest rates. What is the point of the RBA issuing and buying back its bonds?

[@sophie9264]

Hi, thank you so much for this explanation, I've been struggling with understanding the policy rate corridor graph for a while!

[@mrsymonds]

You're very welcome. The corridor is a very tricky concept and it took me AGES to get it.

[@JustKantGetEnough]

Question I haven't been able to find answered anywhere: What does the RBA do with the interest it earns through the cash rate????

[@mrsymonds]

You know I've never ever thought about this. You could try asking the RBA? I think it would just be recorded as income for the central bank, which could then be paid out as interest for savings (on the other side).

[@alexeykovalev5078]

Thank you for the good video. Only one small remark - it's not a 0.25 basis point but 0.25 percentage point which equal to 25 basis points, because 1 basis point = 0.01 percentage point (it was mentioned on some drawings at the beginning of the video).

[@mrsymonds]

A really great point. Thanks for clarifying. I'll add this to the notes about that video.

[@darrendwyer9981]

Hello my friend. I also would like to offer a suggestion because your intention is honorable and personal presentation is conducive to doing these type of videos. Firstly, video yourself say on a white board or something else where you make it "omnipotent" for want of better term where it is very very clear what line you are pointing too and what you are explaining. I am old but I do know that many watch this sort of thing on very small devices and whilst this is not me, your graphical presentation gets lost in the "subtleness" so make it all very BOLD AND CLEAR. This is certainly no criticism but just a point of view. I hope this helps. All the very best

[@mrsymonds]

Cheers for the feedback. Thanks for watching

[@darrendwyer9981]

@@mrsymonds you are ever so welcome. Stay safe. cheers

[@jessiahn8317]

Great video well done

[@mrsymonds]

Thanks for the comments! Good luck with your eco studies.

[@hands7855]

Thank you so much for this, it really helped me out with my essay writing! I do want to ask: with the current cash rate at 0.10%, does that imply the deposit rate is now in the negatives? And if so, what would that mean for the cash market?

[@_sweetpea0045]

From what I have been told by my Eco teacher, the RBA has actually decreased that to -0.1 ppt so now the deposit rate is from 0% to 0.1%. I don't know if that is a good enough explanation but oh well.

[@hands7855]

@@_sweetpea0045 oh no that's actually very helpful thank you :)

[@mrsymonds]

Check out here: www.rba.gov.au/education/resources/explainers/unconventional-monetary-policy.html Scroll down to "Policy interest rate setting". Thanks for watching!

[@LOLTRON4000]

Great video matey

[@mrsymonds]

Cheers Jacob. Thanks for watching!

[@MADgamer9212]

Thanks heaps for this clarification, HSC tomorrow wooohooo hahaha

[@mrsymonds]

No worries! Hope it went okay

[@MADgamer9212]

@@mrsymonds went good thankyou, besides that loaded last question haha, ahhhh well.