Economic Management (Unit 4 Topic 3)
Australian Monetary Policy 1999 - 2026 :: interactive graph
Cash Rate Explorer
The cash rate is the interest rate banks charge each other for overnight loans — and it's the single lever the RBA pulls to steer the economy. Move it, and mortgage rates, business lending and savings rates follow. This tool tracks every quarter of that story since 1999.
Tap the period buttons to zoom into a cycle, or leave it on "All years" to see the full sweep: the long climb through the mining boom to 7.25%, the emergency plunge during the GFC, a decade of easing down to 0.10%, then the sharpest hiking cycle since 1994. The shaded bands mark tightening, easing and the COVID-era record low.
Now switch on the inflation overlay. This is where it gets interesting. The gap between the two lines is the real interest rate — the cash rate minus inflation. Positive means policy is restrictive, actually slowing the economy. Negative means it's still stimulatory, even if the nominal rate is climbing.
Look at 2022. The RBA was hiking hard, yet the real rate sat deeply negative — below −6% at one point. Policy was still adding fuel. That gap explains why the RBA had to move so far, so fast.
Transmission Effect of Monetary Policy :: interactive activity
Background
Monetary policy changes flow through the economy through four channels:
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savings and investment channel;
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cash flow channel;
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asset prices and wealth channel; and
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exchange rate channel.
These flows will then influence the level of activity in the components of aggregate demand, with a consequent effect on prices and GDP.
You can read more about this at the Reserve Bank of Australia website.
How to use the interactive:
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Read change at top - is monetary policy loosening or tightening ?
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Then select the effect of the change in the cash rate on deposit and lending rates, and then continue through to determine the changes in transmission channels, all the way through to changes in GDP.
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Hit submit answer to see how you scored !